Why Are Rare Earth Permanent Magnets Much More Expensive Than Ordinary Magnets?

Rare earth permanent magnets (e.g. neodymium-iron-boron, samarium-cobalt) are significantly more expensive than ordinary magnets such as ferrites. The core reasons lie in scarce resources, sophisticated production processes, performance premium, and the combined effects of policies, supply and demand, leading to a huge cost gap between rare earth permanent magnets and conventional magnetic materials.

1. Core Reasons (At a Glance)

• Scarce resources + high mining & refining costs: Rare earth ores feature low reserves and difficult separation from associated minerals, resulting in high environmental protection and mining costs. Praseodymium and neodymium account for about 30% of neodymium-iron-boron magnets, while medium-heavy rare earths like dysprosium and terbium command even higher prices. Rare earth costs make up 60%-70% of the total production cost.

• Sophisticated production processes + high energy consumption: The manufacturing involves powder metallurgy, sintering, hydrogen decrepitation, precision machining, and surface anti-corrosion treatment (nickel/zinc/epoxy coating). Strict requirements for yield and quality control drive processing costs far above those of ordinary magnetic materials.

• Performance premium: The energy product of rare earth permanent magnets is 5-10 times higher than that of ferrites, with superior high-temperature stability and anti-demagnetization capability. They are indispensable for high-end applications (new energy vehicles, wind power, medical devices), and prices rise with performance grades (H/SH/UH series).

• Policy and supply-demand drivers: Export quotas, environmental regulations, surging demand from new energy sectors, and concentrated supply sources keep prices on an upward trend with limited downward flexibility.

2. Cost Comparison (2025 Year-End Reference)

• Rare earth permanent magnets (NdFeB N35 grade): Approximately $19.5-$22.0/kg; high-performance H series: above $27.5/kg.

• Ordinary ferrites: Approximately $0.14-$1.4/kg, representing a 10-100 times price difference.

3. Foreign Trade Quotation Tips

• Tie quotations to rare earth price cycles, and specify product grade, dimensions, coating type, magnetizing method and minimum order quantity (MOQ) clearly.

• It is recommended to adopt a formula-based quotation: (Rare earth cost + Fe-B cost + processing cost + coating cost + profit) × exchange rate × (1 + tariff rate), with a pre-agreed price adjustment mechanism.