Five Dimensions of Magnet Material Pricing

Magnet material prices consist of five core components. Understanding these dimensions helps judge whether the quotation is reasonable.

1.raw material cost. The most expensive part of rare earth permanent magnets is rare earth raw materials. Although the weight accounts for about 30%, the cost accounts for much higher than 30%. The raw material cost of large-size magnets can account for about 80% of the total price. The industry often calls magnet material factories "rare earth porters". In addition to rare earth, auxiliary elements such as iron and boron are also included in the material cost.

2.processing cost. Affected by equipment upgrading and industry scale expansion, magnet material processing costs have been declining for many years. Even with rising labor and prices, processing costs remain low.

3.operating cost. Including factory daily operating expenses such as plant, labor, management and loss, it is a necessary part of price composition.

4.tax cost. It mainly includes 13% value-added tax, additional taxes and enterprise income tax, which are stable and indispensable.

5.corporate profit. The current magnet industry profit is generally low. The profit margin of blank manufacturers is about 3%–5%, and the profit margin of finished product processing enterprises is about 5% which is good, and very few enterprises can reach 10%. Rare earth prices fluctuate frequently. Raw material price increases after order pricing can easily lead to losses. The industry is highly competitive, and profit margins are continuously compressed.

Waste recycling is similar to futures operation, with uncertain price fluctuations and cannot stably support profits. Manufacturing costs are highly transparent. Excessive price pressure easily leads to quality compromise. Reasonable pricing can ensure stable supply and product quality.