The Update on The Magnet Industry 2024/10

Highlight of the Month   ◎ Jerry Yang, COO

It has been two months since our last update. October is typically the month when orders for the following year are finalized. In recent months, the price of rare earth minerals has reached a temporary equilibrium, supported by insufficient market demand and China's control over the source of rare earth minerals.

However, there are still some variables worth noting behind this stable situation: Firstly, internal sources indicate that some magnet suppliers are increasing their inventory levels of raw materials. Secondly, the Lunar New Year next year will come earlier, around the end of January, and coupled with pessimistic market expectations, most factories may enter the Spring Festival holiday early. Finally, historically, the Chinese government tends to raise or at least maintain mineral prices at the end of the year.

Considering these three variables, in addition to the fact that mineral prices will not decline before the Lunar New Year, it is estimated that mid-November this year will be the deadline for placing orders for production in the first quarter of next year. At the same time, under the conditions of scarce raw materials circulating in the market and the expected labor shortage after the New Year, the supply chain of permanent magnetic materials may not be relatively stable until the end of the second quarter of next year, including delivery time, quality, and price.

Turning to this month's news, the Minerals Security Finance Network (MSFN), led by the United States, has begun to connect resources from various countries using the methods that a free market economy excels at. MSFN can be said to have transformed the Minerals Security Partnership (MSP), which was established a year ago, into a more practical cooperative network. By connecting member and non-member countries of MSP, it promotes the smoother and more focused flow of technologies and funds related to important minerals to necessary projects.

The main purpose of this network is to reduce the potential risks brought by being monopolized by a few countries for essential minerals. In the context of the magnet industry, this means avoiding or mitigating the damage caused when the supply of rare earth minerals is used as a bargaining chip or even a weapon in geopolitical struggles. MSP originally included the United States' allies in Northeast Asia, the European Union, and Australia. With India's further participation in MSFN, it seems to be encircling China's supply chain, but in reality, it may be closer to a multi-party attempt to catch up with China's mining technology and scale. The network is not a stable organizational form, and there are still opportunists who may tilt towards the more profitable side at any time.

Following the logic of MSFN, Canada, as an ally of the United States, continues to invest resources and efforts in mineral exploration and separation technology. Niron Magnetics, born at the University of Minnesota in the United States, has gradually moved from prototype to mass production, first testing the waters in the Audio industry, and its goal is undoubtedly to gain a foothold in the rapidly growing electric vehicle industry. Japan's long-term research on samarium-cobalt magnets is no longer news. This time, by adding an additive to improve the fineness and uniformity of crystals in magnets, the remanence and maximum magnetic energy product of magnets have been greatly improved. However, industrial production at a price that meets market requirements has always been a development threshold for this type of material.

From a market perspective, whether it is starting from the independence of rare earth minerals, the invention of rare earth-free magnets, the strengthening of samarium-cobalt magnets, or the new motor design that reduces the use of rare earth magnets, many projects are certainly linked to the development trend and growing demand of electric vehicles.

In addition to the electric vehicle field, the demand for high magnetic energy product permanent magnets will also grow rapidly with the development of AI, robotics, and automated production. As the brain composed of electronic signals, AI can transform electronic signals into actual actions through motors, which are the limbs that realize its thinking in the real world, and permanent magnets can ensure the limbs are small, flexible, and powerful. In this trend of inevitably increasing technological demand, where the network led by Europe and the United States will go, we will closely monitor.However, we must also consider whether China's magnets, once no longer used as geopolitical tools, could instead flood the international market, creating an unstoppable competitive wave.

Our top five picks this month cover the latest global trends in magnetic materials.

#MSFN #samarium-cobalt-magnets #Niron #RareEarthFreeMagnet #India #ElectricMotor

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