With fluctuations in raw material prices, NdFeB (Neodymium-Iron-Boron) magnet enterprises are facing cost pressures.

Recently, the sharp fluctuations in rare earth raw material prices have plunged NdFeB (Neodymium-Iron-Boron) magnet enterprises into a cost dilemma. Didymium alloy, the core raw material for NdFeB magnets, has seen its price surge by over 30% in the past three months. Some enterprises have admitted that their profit margins have been severely squeezed, and the industry is now confronting the challenge of "increased volume but reduced profits."

Data shows that the average price of didymium alloy in the first quarter of 2025 soared to over 800,000 yuan per ton, marking a 28% increase from the fourth quarter of the previous year and reaching a two-year high. Prices of heavy rare earths such as dysprosium oxide and terbium oxide have also risen simultaneously, with the price of terbium oxide jumping by 15% in a single month. Rare earth raw materials account for over 60% of the production costs of NdFeB magnets, and the continuous price hikes have directly heightened pressure on the production side of enterprises. The head of a medium-sized magnet enterprise revealed that raw material costs in the first quarter increased by 22% year-on-year, while product prices could only be raised by 8%, resulting in a 5-percentage-point drop in gross profit margin compared to the same period last year.

Behind the price fluctuations lie factors such as soaring global demand from the new energy industry and regulatory influences on the rare earth supply side. With a substantial increase in the production of new energy vehicles and wind power equipment, the demand for NdFeB magnets has surged by over 40% year-on-year, driving up the demand for upstream rare earths. Meanwhile, some major rare earth-producing countries have tightened resource controls, further exacerbating the market supply-demand imbalance.

In response to cost pressures, enterprises have adopted various countermeasures. Leading companies have secured part of their raw material supplies through long-term agreements, while smaller manufacturers have attempted to optimize formulations to reduce the usage of heavy rare earths while maintaining performance. Additionally, multiple enterprises have accelerated their overseas expansion by establishing raw material reserve bases in Southeast Asia to mitigate procurement volatility.

Industry experts point out that raw material price fluctuations are unlikely to subside in the short term. Enterprises need to reduce unit rare earth consumption through technological innovation while exploring supply chain diversification. As industry consolidation accelerates, companies with cost control capabilities and technological advantages will become more competitive, and the industry may witness a new round of reshuffling.