High-purity rare earths grow in demand

High-purity rare earths products represent an important and fast-growing market, says market analyst Roskill. Its report, The economics of rare earths 1994, states that separated rare earths claims around 75% of the value of the world rare earths market and that this proportion is set to increase.

With prices of some separated rare earths reaching up to one thousand times those of mixed rare earths compounds, high-purity rare earths products represent an important and fast-growing market.

Although separated rare earths are estimated to account for no more than 25% of the world market for rare earths by volume, they claim around 75% of the estimated US$400 million per annum world market by value. According to the report, this share is increasing as end-users such as permanent magnets, phosphors and advanced ceramics continue to expand their markets, while demand is relatively static in the industries which consume high-volume, low-purity rare earths such as petroleum cracking catalysts. The main area of short-term growth in demand for rare earths lies in the use of neodymium oxide in permanent magnets. Neodymium-iron-boron magnets are the highest-strength magnets currently produced, with markets in industrial motors, medical imaging body scanners, automobile starter motors and voice coil motors.

Roskill says that magnets are forecast to achieve average annual growth rates of 13.7-21.2% throughout the 1990s, accounting for 6,000-10,000 tonnes rare earths oxides by 2000. Samarium-cobalt magnets are also still in demand for high-temperature, corrosion-resistant uses.

A second important growth market is nickel-hydride batteries, currently replacing nickel-cadmium rechargeable batteries in many applications. According to the report, demand for rare earths in the production of fluid-cracking catalysts, which appears to have leveled off, could fall later in the decade because of the development of alternative raw materials such as ultra-stable zeolites.

Meanwhile, as environmental awareness continues to increase, the demand for cerium in autocatalysts to reduce exhaust emissions is expected to grow. The main area of growth for cerium oxide lies in the European Union, where catalytic converters have been added to all new cars since 1992. As a result, Rhone-Poulenc, the largest European rare earths producer, has cut production of cerium abrasives and is concentrating on the supply of cerium oxide for autocatalysts.

The importance of high-purity value-added rare earths products is reflected in the co-operation between major producers Santoku and Rhone-Poulenc. In order to try and improve both companies’ profitability, they are concentrating their joint efforts on achieving a fully integrated rare earths operation. Such co-operation agreements are likely to occur increasingly in the industry.

Other processors have been forced into closures. Chinese rare earths producers are attempting to end their price war and stop the undercutting which has made rare earths production barely profitable, by forming a cartel which adopted uniform prices starting Jan. 1, 1994.

However, the move comes too late for some processing companies, especially in Japan where they have suffered from the combined effects of falling rare earths prices and the appreciation of the Yen.

The report says that the supply of processed rare earths is expected to become increasingly internationalized as the CIS and southeast Asian producers join Japan, Europe, China and the U.S. as sources of rare earths before the beginning of the next century.

It is likely that Japan will remain a leading authority in rare earths research and development, while output of less highly processed products will move to China and southeast Asia.

For more information about the report, write Roskill In-

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