Crashing rare earth prices and impact

An article in the New York Times (Nov 15,2011) describes the 67% drop in prices for several rare earths including neodymium, cerium etc.  The rapid price increase in recent years was caused by China, which produces 97% of the world’s supply of rare earths, imposing quotas and export taxes for rare earths, thus cutting exported supply by about 50%. The results was a rush to locate in China to gain access to supply. Should companies revert back to decisions as before the manipulated price surge? Should alternate sources of world supply, justified at the high rare earth prices, continue to be developed or abandoned ? What global supply chain strategy will provide manufacturers more control over their profitability?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

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