APOMA General Meeting at Photonics West
Ballroom A – Intercontinental Hotel
8:30-10am, Wednesday, 25 January, 2012
Rare earth elements (REEs) are a group of 17 elements that have valuable uses in optics, energy and military equipment. REEs gained global attention when prices began to rise in 2009, a trend that continued into 2011. During this two-year period, a debate began between those calling for the U.S. government to try to curb the prices’ rise by ensuring supply and those arguing that market supply and demand should be allowed to work unimpeded.
Higher prices encourage the entry of new suppliers and encourage existing suppliers to expand. Existing firms have mushroomed in size along with REE prices, new firms have been created, and new deposits have been discovered, as to be expected with the greater incentive to explore.
The inevitable result of this supply expansion is a change in the price trend. In July, prices began a decline that has lasted four months and counting, intensified in October, and brought REE costs down about 40 percent (from the peak). This is less a function of new supply physically becoming available than it is the prospect of more new supply than expected becoming available. REE prices had skyrocketed on the anticipation of long-term shortages, but the market is now correcting, as anticipated shortages no longer seem as acute.
In the second half of October, leading Chinese suppliers announced suspensions of production. Their unpredictable behavior may reintroduce the fear of chronic or acute shortages that drove the market higher. Indeed, this seemed to be the explicit goal of the initial announcement.
Chinese production dominance creates an instability of supply of lanthanum oxide (used on glass manufacture) and cerium oxide (used in polishing components). We will discuss the impact of this instability on APOMA members, customer and on critical US optics programs.
Panel participants:
- Don Janeczko from ITT
- Chris Ghio from Ohara
- Heather Rayle from Schott
- Mark M. Mayton from Flint Creek Resources
- Defense Logistics Agency
