Supply and Demand

Karen A. Newman

I first learned of recent rather dramatic price hikes in cerium slurry when a reader with cause for worry called me in late September. Cerium is one of the 17 rare-earth elements (REEs) – numbered 57 through 71 on the periodic table, plus scandium (21) and yttrium (39) – many of which are critical in the manufacture of products at the very heart of our high-tech world, products for which demand is skyrocketing. Cerium slurry, made from cerium oxide, is used in the photonics industry to polish lenses used in medical, defense and entertainment applications.

My caller’s concerns were twofold. With prices on a recent order running 260 percent higher than on one placed only four weeks earlier, he was worried that the cost of this material could very soon and very seriously cut into his profits. He also worried about reports that China – where he procures his slurry – plans to reduce exports over the next few years, reportedly due in part to growing domestic demand for an increasingly high-tech lifestyle. “If we can’t get it,” said my caller, “we can’t polish optics.”

China, which is said to produce as much as 97 percent of the world’s REE supply, has stated that by 2012 it will cut exports of its rare-earth minerals by 40 percent, according to published reports. At about that time, according to experts, world demand will outpace current supply. And while sizable deposits of these important minerals do exist around the world, by many estimates, alternative production won’t be available to the market for several years.

As REE-reliant businesses search for alternatives and alternate sources, US legislators are considering bills to jump-start the domestic rare-earth mining and refining industry, shuttered since the 1980s, when prices for imported product dropped so low that sustaining the industry became impossible.

As this issue goes to press, the story is still unfolding, and we will continue to monitor the situation. Look for a comprehensive feature on rare-earth elements and their importance to photonics in a future issue. In the meantime, let me know what you think. Write to me at karen.newman@photonics.com.

At the moment, I am making final plans to attend Frontiers in Optics 2010, the 94th annual meeting of the Optical Society of America, in Rochester, N.Y. Be sure to visit Photonics.com for show highlights.