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Ce-NdFeB: A gift or a curse for the rare earths industry?

In recent years, production of cerium-containing sintered NdFeB magnets in China has soared following years of concentrated research and government directives aimed at identifying new commercial uses for chronically overproduced cerium.

Periodic table of element cerium

In recent years, production of cerium-containing sintered NdFeB magnets in China has soared following years of concentrated research and government directives aimed at identifying new commercial uses for chronically overproduced cerium.

On one hand, the rapid commercialization and scale-up of Ce-NdFeB in China has been a success. We estimate that magnets were responsible for 18% of global cerium oxide consumption last year, up from just 5% in 2017. The use of Ce-NdFeB magnets in low-performance applications like audio speakers, e-bike motors, industrial applications and more has enabled an otherwise-thin supply of NdPr oxide to go further – to yield more magnetic alloys than it otherwise would.

On the other hand, however, our research suggests that rapid uptake of Ce-NdFeB in recent years has not come solely at the expense of conventional NdFeB, but has also come at the expense of ferrite in some applications, like speakers. In the latter case, the adoption of Ce-NdFeB in place of ferrite results in an acceleration of NdPr demand growth, not a rationing of supplies, potentially countering China’s desire to ameliorate the balance problem and undermining a perceived upside of Ce-NdFeB.

Magnet parts

As such, depending how the future of Ce-NdFeB demand evolves, the net result could be a long-term tempering of NdPr demand for NdFeB (unlikely in our view), or an acceleration of NdPr demand (more likely in our view) as the compelling cost-performance balance of Ce-NdFeB sees it increasingly displace ferrite in low-performance, dissipative applications – from speakers to kids toys to luggage clasps and beyond.

In summary, growing adoption of Ce-NdFeB is arguably a gift in that it will invariably drive more consumption of cerium and consequently will help lift cerium prices. However, towards the aim of rationing NdPr oxide supplies to enable more magnet production for fast-growing applications like EVs, robotics and advanced air mobility, the ongoing adoption of Ce-NdFeB in place of ferrite for some applications is arguably a curse.

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