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Rare earths and automation technology - part 3

Price problems with rare earths

Produktion von Seltenen Erden in China.

Price explosions 2011 – speculative-driven

2010 and even more 2011 the prices of rare earths exploded. The price development from 2009 up to the 1. Quarter 2012 for those rare earths elements that are in particular important for the automation technology and already treated, shows the following table.

For all six selected elements the price increase rates from 2009 to 2011 are betwenn the fivefold and twenty five-fold (between almost 500% and 2,500%).

The prices for neodymium and dysprosium, important for servo motor, had more increased than tenfold during this period.

Price speculations to rare earths


The price explosions are speculative-driven and do not go back on production failures. The background for the speculation is China’s effort to take state-control of the production of rare earths in a much more stronger manner than in th epast. We will outlines this in the next thesis.

This governmental aproaching, which started in 2010, caused dealers in China according to the Financial Times, to accumulate enormous speculative stocks.1 However, the calculation of the speculators did not completely fulfill as the the export quotas, determined by China, were only to 60% exhausted in 2011.2



Part 1: Rare earths: Extraction and structural problems

Part 2: Supply and demand until 2016

Part 3: Price problems with rare earths

Part 4: The role of China with rare earths

[1] Hook, Leslie: China tries to reignite rare earths demand. In: der Financial Times, 20. October 2010
The overstated fear for rare earths. In: der  Financial Times, 13. March 2012

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4 parts and 2 interviews