Sky-high rare earth prices hit downstream profits

Critical or just plain expensive?

Sky-high rare earth prices, despite the recent pullback, are hitting profitability at some of the western world’s biggest companies and end-users of the metals. The latest is German car parts maker Continental which warned that it was facing headwinds due to price hikes of rare earths and rubber, according to the Financial Times today.

Throughout the year industrial giants such as Phillips have been warning of the implications of sudden shifts upward in rare earth prices.

While rare earths are a small part of the total cost of complete vehicles their proportion is higher in components, as Continental is finding to its cost. It noted that the price of dysprosium used in magnets for electric motors had risen nearly 20-fold since 2010.

This places “an extreme burden on our component suppliers. This is a new thing. Prices for rare earths were never a topic before, they were just a small cost position in Continental’s overall business,” Wolfgang Schaefer, chief financial officer, was quoted.

A lot of attention has been placed on the criticality of rare earths and the supply disruption possibilities but price is just as much an issue for downstream industrial consumers.

For more news, please visit www.metal-pages.com

Tags: , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: