January 2010Rare earths Windows of opportunityMicrosoft causes...

January 2010
Rare earths Windows of opportunity
Microsoft causes demand and prices in select rare earth oxides to spike
By Alison Tran, Americas Correspondent

IN THE BUILD-up to the Christmas holidays, select rare earth oxides (REO) saw a surge in demand as production of electronics sharply increase. Despite the recessionary year experienced worldwide, neodymium oxide and praseodymium oxide prices have risen in tandem with demand. Both of these REO are key elements in magnets used in electronics, namely computer hard drives and has been driven by one of the worlds largest computer software manufacturers, Microsoft Corp. The launch of Microsofts new Windows 7 operating system has resulted in rise in computer purchases and with each computer at least one hard drive is sold.
It is very rare that an industrial mineral is so tightly linked to consumer spending, but in the case of neodymium oxide, prices for the mineral rose 11% from November to December 2009. Neodymium oxide sales (99%, bulk, FOB, China) were quoted at $16.10/kg, up from $14.5/kg.
In tandem, prices for praseodymium oxide (bulk FOB) which is often used interchangeably for neodymium oxide in magnet technology when prices of neodymium start to rise, have increased 6% from $14.50/kg to $15.30/kg.

Windows drives HD sales
A leading producer told IM: Consumers have been waiting for the release of Windows 7 to buy a new computer and now that the software is out, we are seeing an increase in hard drive sales.
At the same time, increased demand for rare earths is coming from the growing trend among consumers to replace new disk drives instead of purchasing brand new computers.
Consumers dont want to spend money to buy a brand new computer when they can just replace the hard drive. In terms of rare earth consumption, buying a new hard drive, or a new computer is the same, said the producer.
Neodymium oxide and praseodymium oxide are also used in the magnets critical to hybrid and electric vehicles, and wind turbines. To manufacturer a three megawatt wind turbine, for example, about two tonnes of rare earth are used.
Additionally, for every Toyota Prius electric motor, 1 kg of neodymium oxide is used, and each battery in the hybrid car consumes 10-11 kg of lanthanum.
In addition to rising prices for rare earth in magnets, prices for cerium oxide are also picking up, underscored by strong production of liquid crystal display (LCD) screens, which cerium oxide is used to polish.
Latest prices for the cerium oxide (99%, bulk purchases, FOB China) have been quoted at $4/kg, up from $3.1/kg.
Producers said they have been encouraged by recent results from leading South Korean manufacturers of electronics.
Last month, Samsung Electronics, the worlds leading producer of rare-earth based memory chips and LCD screens, reported its best quarterly net profit for Q3 2009 of $3,140m., on a resurgence of sales.
In a year where consumer spending has hit significant lows, the demand uptick in line with the rise in the production of electronics for Christmas gave the handful of the worlds rare earth producers a reason to be positive.