A few months ago in the December/January issue of the magazine, I suggested that we should probably get used to the idea that high prices will now prevail for neodymium and some other critical elements of neodymium-iron-boron (“Neo”) permanent magnets. In the same issue, Stan Trout asked for some explanation of the cost benefit of such critical elements, presumably on the resulting performance of a Neo magnet. This is a very important consideration in selecting the most cost effective magnet grade for any new application, and it is a topic which has generated the greatest interest and discussion at the strategic seminars I have been giving to select industry groups in recent years. So I would like to revisit a few of the critical elements whose supply and demand I discussed previously, now also looking at their cost benefit to the magnet’s operating performance.
While new resources for rare earths are expected to come on-line from elsewhere within the next few years, China will remain the dominant global supplier of rare earth oxides and metals. But China has also been implementing a strategy to support the development of downstream rare earth industries, such as Neo magnets, and to conserve its natural rare earth resources. It is doing this by tightening control over the rare earth oxides and metals that it exports, through the imposition of higher export duties and stricter export quotas. For 2008, the new tariffs on exported neodymium and dysprosium are 15% and 25% respectively, and the quota for all rare earth oxides and metals is 22,780mT, about half the amount it exported the previous year; only 23 Chinese companies are now approved exporters, down from 41 in 2007. By taking these and other measures, the Chinese government has demonstrated its desire and ability to stabilize rare earth prices, albeit at relatively high levels.
While almost all the neodymium metal exported from China now goes to customers in Japan, a strategy to hedge against China’s export restrictions is already being implemented by Japanese producers of rare earth alloy and magnets, who are investing in new plants within China itself. All of the foregoing, coupled with the weakened U.S. dollar against the Yuan, suggests that high prices have now become the status quo. So after oscillating within a range of $40/kg to $50/kg over the past twelve months, the price of neodymium metal appears to have stabilized recently at around $42/kg. Compare this to the $28/kg I reported in this column for the end of 2006, or the $8/kg enjoyed only two years before that.
The ores which contain heavy rare earths such as dysprosium are much less abundant than those producing light rare earths, and occur mainly in Southern China. As such, the price of dysprosium can also be affected quite quickly by controls in local regions, such as the recent temporary suspension of heavy rare earth production in areas of Jianxi province to counter weak demand. The price of dysprosium metal has risen steadily in recent years, leveling off recently at around $155/kg. To meet the demands of major new automotive applications such as motors for electric power steering and hybrid electric vehicle drives, dysprosium is substituted for some of the light rare earth neodymium in the composition to improve the magnet’s intrinsic coercivity and hence provide resistance to demagnetizing fields at elevated temperatures, so there is a correlation between this and the magnet’s raw materials cost. A wide variety of Neo magnet grades exists to allow selection of the one that gives the required intrinsic coercivity at the maximum temperature to be experienced in a particular application. For example, consider a motor that runs at 200oC and requires use of a sintered “EH”-grade Neo magnet which has relatively high dysprosium content. Is it worthwhile switching to a “UH”-grade, say, with less dysprosium and lower raw materials cost? The problem is that the significantly lower intrinsic coercivity of the UH-grade will require its resistance to demagnetization at this temperature to be compensated by additional magnet thickness (volume), and there is actually a net increase in raw materials cost of about 16%. Switching to the even lower coercivity “SH”-grade raises this cost by about 32%. At least at today’s prevailing prices for rare earth elements, the general rule appears to be that the required resistance to demagnetization for a Neo magnet should simply be achieved with the smallest possible thickness, regardless of the dysprosium content of the magnet grade which provides this.
Cobalt is an equally valuable component of a Neo magnet’s composition, in which it is substituted for some of the iron to provide high temperature stability and improved corrosion resistance. Having cost as little as $15/kg several years ago, it peaked at $110/kg in January of this year due to short supply, and has subsequently fallen to around $95/kg. Unlike the rare earths, cobalt is just a bi-product of nickel and/or copper which is mined mainly in Africa, where many new production facilities are planned to come on-line over the next few years (mainly in the Democratic Republic of Congo). A world supply surplus of cobalt is projected for next year, followed by a continued downward price trend to around $25/kg by 2015. I have previously suggested that about 2wt% of cobalt is sufficient for its beneficial effects to be realized, but probably no more than this because cobalt also degrades the intrinsic coercivity, partially offsetting the benefit of dysprosium. But it also enhances the flux density of the material, which is particularly valuable for the lower energies inherent in bonded Neo magnets which are made using melt-spun powder. 2wt% at $25/kg amounts to a premium of only 50¢/kg for the material to have the benefits of cobalt, and if used in a typical compression-molded Neo magnet, over 1% more magnetic flux will also be gained. With 4wt% of cobalt at $25/kg, the bonded Neo magnet gains about 2% flux for a premium of $1.00/kg, still a particularly valuable cost benefit for the majority of these magnets used in consumer electronics which mostly weigh only a few grams or less.
So the design of a device need not be compromised in order to save on the cost of Neo, either by the dysprosium needed for a sintered magnet or the cobalt needed for a bonded one.
Dr. Peter Campbell has been a consultant to permanent magnet producers and users for over 30 years. He has been a professor at the University of Cambridge and at the University of Southern California, and has worked with Magnequench Inc. as its head of Technology and head of Sales. Please contact him at drpeterc@earthlink.net, or visit www.magnetweb.com.
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"Cost Benefit of Additives for NdFeB" (Aug/Sep
2008)
"Hybrid Electric Vehicles" (Jun/Jul
2008)
"Invention or Innovation?"
(Apr/May
2008)
"Supply and
Demand, Part 2" (Feb/Mar 2008)
"Supply and
Demand, Part 1: Neodymium" (Dec 2007/Jan 2008)
"Magnet Price Performance" (Fall 2007)
"The Next Great
Magnet" (Summer 2007)
"Rising Rare Earth Prices" (Spring 2007)