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Rare Earth Metal Pricing Skyrockets, May Result in Higher Electronics Pricing

Lightwreather

Summary

Nikkei reports that we are at an inflection point for the semiconductor industry - mostly due to its most basic prime matter, rare earth metals (such as copper, lithium, or tin), which are used as elements for the manufacturing of semiconductors, having seen tremendous price increases in the last year.

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A look at the yearly price action for some such rare-earth metals showcases just how much more expensive any sort of manufacturing that uses them has become in the past year. The fact that lithium dioxide has increased around 150% YoY can be identified in the increasing popularity of electric cars. However, lithium isn't alone in its upwards price run; copper (one of the most common conductors) has seen price increases to the tune of 37%; aluminium, which enables lightweight metals and is commonly found on computing's cases, has increased by 55%; and tin has increased 82%. Even relatively niche rare earth metals such as neodymium (commonly found in audio drivers and related electronics) and praseodymium (used as an alloying agent for magnesium in aircraft engines and other applications), have increased by almost 74 percent YoY. Several other rare-earth metals have also increased in pricing.

The price increase for these most elementary elements in almost anything technologically-related will (and likely already is) leading to increased end-user pricing. There is only so much that the manufacturing and supply chains can absorb before they hit the red zone. However, as is always the case, it's the small players being affected first. Electronics suppliers for hardware assembly and manufacturing giants such as Lenovo, HP, Apple and Samsung face a notoriously unforgiving competitive landscape, and they can't easily transfer the increased component costs to their global clients.

A perfect storm of COVID-19 and its interaction with supply chain logistics is one of the reasons for this price increase, as well as the currently ongoing (and seemingly never-ending) component shortages. Coupled with soaring demand from multiple technological inflection points (such as vehicle electrification and machine learning as well as the increasing demands for data volume processing) also led to supply-chain management problems and skyrocketing prices for some of the major industry players' products, as we've extensively reported.

However, another major element is also a part of the equation: geopolitics. China currently stands as the only country with a fully integrated, in-territory supply chain that covers everything in the production of rare earth metals, from extraction to refinement and eventual processing. As of last year, China was responsible for around 55% of global rare earth mining output, and 85% of all rare earth minerals have to go through China in one way or another throughout their manufacturing process. This gives China powerful leverage in its relationship to the global economy.  Potential tightening when it comes to China's export controls was enough to partly fuel price increases.

Angela Chang, an analyst with the Industry, Science and Technology International Strategy Center (ISTI) at the Industrial Technology Research Institute broached the subject with Nikkei Asia.
"China has the upper hand and dominated production and refining of global key rare earth materials, and it also controls some other key metals that are all needed for building not only civilian, and industrial devices but military and aerospace equipment," she told the publication. "The Chinese advantage has become a key bargaining chip for Beijing to negotiate with Washington." 

Even as both superpowers vie for economic supremacy, with China's control of the rare metal earths and the US' blacklisting of several China-based companies and even China-bound exports, the escalating tension between them likely will only push prices of those key materials higher in the long term, Chang added.

 

My thoughts

Well, that's just great (my attempt at being sarcastic). Prices for Rare earth metals increasing. Yay for more expensive electronics. Wait a sec, people don't really like that. Well, jokes aside, this is just the perfect storm for an already bad shortage to become worse or more expensive. The only thing we can do rn, is to just wait out the storm and hope that it dies down. Fingers crossed for product prices to come down in 2022?

Sources

Tom's hardware

NikkeiAsia

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Me: is kind of surprised this wasn’t covered months ago…

My eyes see the past…

My camera lens sees the present…

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1 minute ago, Zodiark1593 said:

Me: is kind of surprised this wasn’t covered months ago…

True

"A high ideal missed by a little, is far better than low ideal that is achievable, yet less effective"

 

If you think I'm wrong, correct me. If I've offended you in some way tell me what it is and how I can correct it. I want to learn, and along the way one can make mistakes; Being wrong helps you learn what's right.

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Whatever you do, don't hold your breath for anything good to come of this.

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At the factory I work at, parts that took just a week or less to get before, now take months because aluminium shortage.

 

(Sensors, pistons)

“Remember to look up at the stars and not down at your feet. Try to make sense of what you see and wonder about what makes the universe exist. Be curious. And however difficult life may seem, there is always something you can do and succeed at. 
It matters that you don't just give up.”

-Stephen Hawking

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3 hours ago, J-from-Nucleon said:

rare earth metals (such as copper, lithium, or tin)

So it is already misleading in the articles (not your bad) but these are not the rare earth metals. Rare earth metals are neodymium, praseodymium, holmium, terbium, etc. Just there is a similar market situation that applies to copper and lithium.

 

From a mining and metallurgy perspective there are vast differences between copper - lithium - and rare earth metals. Their mining and metallurgy industry are completely different and distinct. This is always a thing to consider in a discussion about electronics raw materials.

 

From these  metals, the lithium price is different for being primarily demand driven in my opinion. Current production capacity is just unable to cover the demand of the electric vehicle market growing in an insane pace. It is also less related to consumer electronics because even at really high lithium prices the amount of lithium that goes in a laptop's battery does not make up a significant cost. (Just look at the price tags on 30000 mAh power banks: $30)

 

For China: It is possible that Chinese policies affect the market of all these metals the same way, but this is not like "one (non-steel) metal industry".

 

About that, I find it so hypocritical when western politicians stand before their people and say things like "It's China's fault".

There is still a communist dictatorship in China! Leaders should properly organize our mining and metallurgy industries instead of just complaining about it in the front of people to get votes and then do nothing to get alternative supply options.

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On 9/15/2021 at 11:55 PM, poochyena said:

Increased prices isn't terrible, it will incentivize people to recycle more scrap metal and companies to spend more to mine more raw materials.

Nah Intel and Nvidia just decide to spend a crap ton of money and get into space mining

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Cool cool cool.

More prices increase but of XYZ reason, just what we all needed.

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Bullshit numbers made for investors.  

 

They listed a year ago low point versus todays high point, not averaged so ya, the gains look huge but they're not as the prices still fluctuate on the daily. 

 

The article is really focused on rare metals but throw tin and copper in there for comparison.

 

I have no doubt there is a strain on some products and limited quantities available but it'll either run out completely or someone will find an alternative.  

 

Corporations are looking for any excuse to squeeze and as soon as one supplier does, everyone else gets on board.

 

 

 

 

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3 hours ago, SlidewaysZ said:

Nah Intel and Nvidia just decide to spend a crap ton of money and get into space mining

what do you mean "nah"? What I said was true and "Intel and Nvidia just decide to spend a crap ton of money and get into space mining" has no relevance to it unless you think they are starting space mining within the next ~2 years.

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1 hour ago, Heliian said:

Bullshit numbers made for investors.  

 

They listed a year ago low point versus todays high point, not averaged so ya, the gains look huge but they're not as the prices still fluctuate on the daily. 

 

The article is really focused on rare metals but throw tin and copper in there for comparison.

 

I have no doubt there is a strain on some products and limited quantities available but it'll either run out completely or someone will find an alternative.  

 

Corporations are looking for any excuse to squeeze and as soon as one supplier does, everyone else gets on board.

Copper, the average price, is around double the price it was 5 years ago

https://www.macrotrends.net/1476/copper-prices-historical-chart-data

I have no idea what your agenda is but your comment is incredibly misleading. Corporations gain no benefit from high metal prices.

Screenshot 2021-09-17 at 11-19-14 Copper Prices - 45 Year Historical Chart.png

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43 minutes ago, poochyena said:

what do you mean "nah"? What I said was true and "Intel and Nvidia just decide to spend a crap ton of money and get into space mining" has no relevance to it unless you think they are starting space mining within the next ~2 years.

It was a joke although I wouldn't put it past maybe Nvidia to decide to go to space if they thought it would give them an edge in the GPU market.

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43 minutes ago, poochyena said:

Copper, the average price, is around double the price it was 5 years ago

https://www.macrotrends.net/1476/copper-prices-historical-chart-data

I have no idea what your agenda is but your comment is incredibly misleading. Corporations gain no benefit from high metal prices.

Screenshot 2021-09-17 at 11-19-14 Copper Prices - 45 Year Historical Chart.png

They do a great job of claiming that the metal price doubling should equate to the finished product doubling in price even though the product contains only a small amount of the metal.  It never goes the other way though for some reason? 

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1 hour ago, Heliian said:

They do a great job of claiming that the metal price doubling should equate to the finished product doubling in price

Where do that claim this?

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Wind, solar and their associated battery needs are largely driving the price of copper, aluminium and lithium higher.   These energy sources require upto 10x the amount.   This has been reported on several times over the last year (or longer), so much so that we have large corporations in Australia dumping almost a billion into startup mines for it.

Grammar and spelling is not indicative of intelligence/knowledge.  Not having the same opinion does not always mean lack of understanding.  

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22 hours ago, mr moose said:

Wind, solar and their associated battery needs are largely driving the price of copper, aluminium and lithium higher.   These energy sources require upto 10x the amount.   This has been reported on several times over the last year (or longer), so much so that we have large corporations in Australia dumping almost a billion into startup mines for it.

I know this is off topic, but this obsessive need for more of these metals is another reason why nuclear energy is so great. Everyone thinks of nuclear waste, but nobody thinks of the toxic waste produced in orders of magnitude higher quantity in order to mine these rare-earth and non-rare earth metals. Also waste containment. Nuclear waste is some of the most highly visible and regulated waste products out there with the public eye extremely critical of even potential leaks while everyone turns blind eye to the extremely destructive storage and disposal methods of these mining wastes for some reason.

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4 hours ago, thechinchinsong said:

I know this is off topic, but this obsessive need for more of these metals is another reason why nuclear energy is so great. Everyone thinks of nuclear waste, but nobody thinks of the toxic waste produced in orders of magnitude higher quantity in order to mine these rare-earth and non-rare earth metals. Also waste containment. Nuclear waste is some of the most highly visible and regulated waste products out there with the public eye extremely critical of even potential leaks while everyone turns blind eye to the extremely destructive storage and disposal methods of these mining wastes for some reason.

And there is no such thing as nuclear waste anymore,  all the materials people conventionally consider waste can be reused to produce more power.  They are renewable energy sources, more so than solar is.

Grammar and spelling is not indicative of intelligence/knowledge.  Not having the same opinion does not always mean lack of understanding.  

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On 9/15/2021 at 7:57 AM, Mihle said:

At the factory I work at, parts that took just a week or less to get before, now take months because aluminium shortage.

 

(Sensors, pistons)

With all of those Aluminium cans and foils,more recycling is needed.

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2 minutes ago, mr moose said:

And there is no such thing as nuclear waste anymore,  all the materials people conventionally consider waste can be reused to produce more power.  They are renewable energy sources, more so than solar is.

As matter of fact nuclear power is one of the most effective solutions out there.

And nuclear reactors omit only a very small amount of gases that are harmful to the planet.

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On 9/19/2021 at 3:25 AM, Vishera said:

With all of those Aluminium cans and foils,more recycling is needed.

Almost all aluminium cans are recycled in Norway, (not aluminium foil tho).

Mostly because you get a small amount of money back from delivering them to spesific machines.

“Remember to look up at the stars and not down at your feet. Try to make sense of what you see and wonder about what makes the universe exist. Be curious. And however difficult life may seem, there is always something you can do and succeed at. 
It matters that you don't just give up.”

-Stephen Hawking

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