International Journal of Waste Resources

Speculation during the rare earth crisis - Implications for Nd recycling

2^nd World Congress and Expo on Recycling

July 25-27, 2016 Berlin, Germany

Daniel Fischer

University of Stuttgart, Germany

Posters & Accepted Abstracts: Int J Waste Resour

Abstract:

Rare earth elements are often considered critical materials for high-tech products such as wind turbines, electric vehicles or cell phones. In 2010 China strongly reduced its export quotas on rare earths. As a result, the share prices of mining companies and the prices of rare earths increased about thirty times in 2010 and 2011 compared to their values before 2010. Since then rare earth prices have nearly returned to their pre-crisis level. Despite the predicted growth of the market, global rare earth production has virtually stagnated since 2009 according to USGS data. The amount of rare earths in many products decreased due to improved product design while in other products rare earths may be completely substituted by other materials. This paper examines if speculation has played a role during the rare earth crisis or if the crisis may even be termed a speculative bubble. Scientific literature indicates that four conditions are usually met during a speculative bubble. (i) The existence of an exogenous event that raises growth expectations for a certain market, (ii) positive feedback processes during the crisis, (iii) expansion in loan financing and (iv) asymmetric information between insiders and outsiders. The implications of low metal price for rare earth recycling, particularly Nd recycling are discussed. Even at low price level, recycling from end-of-life products containing large amounts of rare earths can be economically viable. Rare earth recycling from cell phones, earphones and similar small products may be difficult to realize as the value of rare earths per product is relatively low.

Biography :

Email: Daniel.Fischer@gsame.uni-stuttgart.de