LONDON (Commodity Online): China's dominance of Rare Earth Elements(REE) over the electronics and automobiles industries are falling as the companies are lowering the inventories and looking for new substitutes.
The price of the REE , which ruled high for over three years, has fallen rapidly since August 2011. The price of cerium and lanthanum which are used in flat-screen televisions and as catalyst in refining of oil have fallen as much as two-third till now and are declining further.
Also the prices have declined by nearly one-third for highly magnetic rare earths, like neodymium, which are used in electronic devices like smart phones, computers and large wind turbines.
China accounts for 94% of the world REE production and since 2006, the Chinese government has been controlling the exports, production of the ores seeing the huge demand for the commodity.
Earlier , according to Toyota (NYSE: TM) announced it's very close to developing new electric motors for its hybrid cars— motors that don't depend on robust supplies of rare earth metals, reported energyandcapital.com
And also the big companies in the US, Europe and Japan are either cutting down production or trying out new substitutes to replace the REE.
According to Sam Berridge, a Sydney-based analyst at Royal Bank of Scotland Group Plc, the after effect of tsunami in Japan and dumping of unpermitted material in China have undercut prices, while industrial substitution has driven “demand destruction,”, reported Bloomberg.
Findings of new REE mines in Australia and in California is also said to support the falling price of REE.
