Fluorescent Lighting Prices Continue to Rise

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Manufacturers warn a decline in the supply of rare earth metals will continue to drive the cost of fluorescent lighting even higher. Over the summer, every major lamp manufacturer announced significant price increases due to the shortage of rare earth metals. Then, prices were forecasted to increase between 5% – 75% depending on several factors, including lamp color, lamp tube diameter, wattage and color mix.

Now, a second round of price increases will go into effect this November and manufacturers say prices may increase by as much as 1,000%.

The problem is a simple case of supply and demand. China, which currently produces 97% of the rare earth metal supply, has recently limited production and increased taxes on the mining of these elements. The current demand for rare earth elements is roughly 134,000 tons a year and global production is 124,000 tons a year. That creates a deficit of 10,000 tons per year.

By 2014, demand is predicted to rise to over 200,000 tons per year. With China predicted to produce only 160,000 tons per year in 2014, the deficit will balloon to 40,000 tons according to the U.S. Department of Energy 2010 Critical Materials Strategy Summary.

Fortunately, the future may not be as bleak as anticipated. The U.S. Department of Energy predicts the situation may actually get better in 2014 when relief will come from new mines and processing facilities. However, only time will tell if this prediction holds true.

Source: [P2] Rare Earth Oxide Prices Rising Fast
Precision Paragon is a manufacturer of energy efficient commercial lighting.
Image: P. Gordon.

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