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Electronics to drive global rare-earth market recovery

Posted: 05 May 2003 ?? ?Print Version ?Bookmark and Share

Keywords:rare-earth material? cerium? neodymium?

An estimated 78,205 metric tons of rare-earth materials worth $1.6 billion were sold worldwide last year, down from 2001 levels of 80,735 metric tons. By 2007, demand is expected to increase 3.2 percent annually, reaching 91,465 metric tons, valued at $1.98 billion. Business Communications Co. Inc.'s (BCC) "Rare Earths: Worldwide Markets, Applications, Technology" report projects that global shipments of rare-earth materials will surge as traditional and emerging applications continue to stir demand.

Future demand generators include rechargeable NiMH batteries, sensors, and medical applications such dental/surgical lasers. Also, the use of rare-earth materials, especially in permanent magnets, is expected to increase as demand from automobiles, computers, consumer electronics, and portable devices strengthens.

Strong demand for cerium and neodymium in permanent magnets is forecast to continue in the next five years. The market research firm also anticipates the recovery of the fiber-optics segment and the emergence of magnetic refrigeration as a commercial market to help boost demand. This industry has been facing difficulties in recent years due to oversupply and a price war late in 2001, which resulted in price cuts of as much as 40 percent. This placed a great deal of pressure on margins, forcing inefficient producers into bankruptcy and leaving most of the rest operating at very low utilization levels. BCC expects price pressure to be a continuing problem for industry players. The market research firm also predicts that industry consolidation will take place this year or next year, especially in mainland China.

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