Last year, tensions ran high – about dirt. Emotions were whipped up about a Chinese embargo on stuff most people never had heard of: Rare earth.The stuff is used to make magnets that go into anything from hard drives to generators and electric motors. Cooler heads tried to point out that rare earth is not rare at all, and that China has as much a monopoly on rare earth as it has on sand. Nobody listened to the cooler heads, and rare earth prices went stratospheric. Step aside, those rare earth prices are crashing down.
“Rare-earth prices are set to extend their decline from records this year as buyers including Toyota Motor Corp. and General Electric Co. scale back using the materials in their cars and windmills. Prices for cerium and lanthanum, the most abundant rare- earth elements, will drop by 50 percent in 12 months.”
As promised in January, engineers at Toyota developed a new “induction”-type electric motor that did not only let the Chinese eat their own rare dirt, but also promised to be more efficient and more compact than the current fixed-magnet motors.
On the back of these news, and a cooling off of auto demand and electric car exuberance, rare earth prices started coming down in August and continue to go south. It’s not just supply and demand: Speculators are fleeing the stuff, and instead of an embargo there are now stories of rare earth dumping in China.
Toyota’s new technology exited the labs and is going in series production. John Hanson, a Toyota spokesman in Torrance, California, confirmed to Bloomberg that “moving from a fixed-magnet motor to an induction motor is a huge savings with regard to rare-earth metals.”
GM will sell a Chevrolet Malibu Eco next year that uses an induction motor, and will cut down on magnets that use the no longer so rare earths.