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21st July 2011
To our valued customers,
The global price of rare earth magnets has risen significantly, and Aussie Magnets will be increasing current prices now and in the coming months.
Demand for China’s raw materials increased after Beijing enforced export quotas, creating a worldwide shortage affecting the magnet industry.
Given that we have always promised our customers great prices, we felt it important to explain these events clearly. If you have a few moments, please read on to understand why this is occurring…
Since July 2010, China’s Commerce Ministry has been reducing export quotas for the raw materials which contain the 17 chemically similar elements required to produce rare earth magnets. Combined with ever-increasing demand from products that are reliant on rare earths such as lithium-ion batteries, plasma screens, LED phosphors, electric motors and many others the prices appear to have been driven up overnight.
• Bloomberg (June 17, 2011): “Rare Earth Prices Double in Two Weeks as China Seeks to Increase Control”
• Financial Times (June 19, 2011): “Rare Earth Prices Soar as China Stocks up”
Behind these price increases is a genuinely commendable effort to clean up China’s mining industry. Beijing’s quotas are part of a strategy to tighten control of mining production and exports, setting tougher environmental standards for the heavily polluting rare-earths separation industry. This policy has resulted in national control of eleven mines since February 2011 and a determination to close down illegal mining segments who don’t obey health, safety, or tax rules.
• Chinese Government (May 19, 2011): "China issues guideline to promote healthy development of rare earth industry"
Even as one of the largest Australia-Pacific importers of magnets, we have been defenceless in combating this and are no longer able to absorb these exponential increases. Historically, Aussie Magnets customers have enjoyed steadily great prices and we are doing everything we can to maintain our competitive pricing schedule. We thank you for your time and understanding.