Why Speaker Prices Will Skyrocket
By Jason Knott
Price of rare-earth metal used in speakers set to increase 40% on July 1.

In addition to skyrocketing prices for petroleum and copper that have affected the cost of cabling, there is another looming crisis for the electronics industry: the increasing price of neodymium, a rare-earth metal.

The magnets are instrumental in the manufacturing of some low-profile loudspeakers from Definitive Technology, Earthquake, Wisdom Audio, Totem Acoustic, BG Radia, and MartinLogan. Not all manufacturers use neodymium drivers, some use magnets made of ferrite, which has the same properties as neodymium but requires a larger magnet.



Due to the rising prices of neodymium, Shin-Etsu Chemical Co. Ltd, a neodymium supplier, raised its price by 40 percent, effective July 1. According to the Business China, it is only a matter of time before the move trickles down to U.S. manufacturers.

Business China says the price for both neodymium and dysprosium "continue to rise steeply due to mining restrictions and the cutting of export quotas for rare-earth minerals by China." China exports over 90 percent of the world's rare-earth metals and houses more than one third of the world's reserves, according to Business China. The market is controlled by the Chinese government, which in recent years has limited export quotas.

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