How changes in the global supply chain affect the price and production of magnets

Published: 2024-04-24 09:58:58 • Daniel Gårdefelt

Magnets are important parts of many businesses, such as electronics, cars, and renewable energy. The global supply chain has a big impact on how they are made and how much they cost. The global supply chain is affected by economic, geopolitical, and environmental issues, which have a big effect on the production and pricing of magnets. The article talks about these effects, mainly on rare earth magnets, which are influenced more than others because they are very specific.

Economic factors

Changes in the economy can have a big impact on how magnets are bought and sold. People tend to buy more consumer electronics, electric vehicles (EVs), and renewable energy options when the economy is doing well. All of these things depend on magnets. This rise in demand could cause supplies to become more limited and prices to rise, especially if the ability to make magnets doesn't grow to keep up. On the other hand, when the economy is bad, demand can drop, which could lead to problems with oversupply and lower prices.

Geopolitical factors

Tensions in geopolitics have a big effect on the global supply line for magnets. A few countries mine most of the rare earth elements that are needed to make high-performance magnets. China is the biggest maker. Any trade restrictions, export controls, or political disagreements involving these key supplier countries can cause problems with the supply of raw materials or make them more expensive, which has a direct effect on the price and production of magnets around the world.

Environmental and regulatory factors

Magnets' global supply chain is also affected by rules and attempts to be more environmentally friendly. The mining and handling of rare earth elements use a lot of energy and can have big effects on the environment. Tougher rules on the environment in major creating countries can make it more expensive to make magnets or limit the supply, which can change prices. Also, the push for more ethical and sustainable supply chains supports the creation of magnet recycling technologies and the study of other materials, which could change the long-term dynamics of supply and prices.

Improvements in technology

Technology changes affect the supply chain by making production more efficient or by giving manufacturers more options besides rare earth magnets. For example, improvements in magnet recycling could make it less necessary to get raw materials and make the supply chain less vulnerable to problems. Additionally, creating new magnet materials that don't need rare earth elements could increase the supply base and possibly keep prices stable.

The way forward

Businesses are becoming more aware of the need to increase the resilience of their supply chains, invest in recycling and other materials, and get supplies from a variety of sources so that economic, geopolitical, and environmental factors don't have as much of an effect on the price and creation of magnets. As the world's reliance on magnet-based technologies grows, it will be important to understand and adapt to the changing patterns of the global supply chain in order to keep things stable and encourage new ideas in magnet production and use.