Price increases for magnets in chocolate moulds

1. Background information on neodymium magnets

We use neodymium magnets for our chocolate moulds. Even with a small diameter, these magnets are very strong and therefore allow the surface area of the mould to be used for as many chocolate items as possible.

Picture: magnets in a spinning mould

Neodymium is a chemical element of the lanthanide or “rare earth” series and 97% of it is mined in China.

Over the past few years China’s government tolerated low occupational health and environmental standards during the mining of neodymium as well as illegal mining and transportation of the material. Due to the now unacceptable levels of damage, but also due to the increasing strategic importance of this material for modern environmental technologies, the Chinese government has taken drastic action: The social and environmental standards were increased with immediate effect, illegal mines were closed and an export tax was raised on neodymium and neodymium products.

However the demand for neodymium products has not decreased. Large quantities of neodymium are used in future-orientated, environmentally friendly technologies such as wind turbines, electric and hybrid vehicles, batteries and fuel cells.

As a result, the price of neodymium has increased by 800% (!) since mid 2010. This is almost directly reflected in the prices of the magnets. The extreme increase in the first half of 2011 is probably an over-exaggerated reaction to the market situation described above, however in the mid and long-term experts expect a higher price level compared to previous years.

 

You can find more technological and economic background information from the Öko-Institut e.V. (Institute for Applied Ecology), Freiburg http://www.oeko.de/oekodoc/1110/2011-001-de.pdf or from the Bundesanstalt für Geowissenschaften und Rohstoffe (Federal Institute for Geosciences and Natural Resources) http://www.bgr.bund.de/DE/Gemeinsames/Produkte/Downloads/Commodity_Top_News/Rohstoffwirtschaft/31_erden.pdf

Up until now these magnets were widely used in chocolate moulds so as to create a safety barrier when sealing double moulds. Together with our clients we will question this strategy and work on a solution to provide chocolate moulds at affordable prices.

2. Price adjustments for chocolate moulds with magnets

Up until now Hans Brunner GmbH was able to keep mould prices steady via a long-term buying strategy for neodymium magnets.

Unfortunately the current price development has come about so rapidly that we can no longer avoid a price increase ourselves. Due to stockpiling and the effect of long-term contracts we will not apply the price increase immediately to all moulds. However, effective as of 01.09.2011 we will increase our calculations for magnets. Due to the dynamic of the price development, these prices are valid until 31.12.2011 and towards the end of 2011 they will be rechecked and adjusted if necessary.

3. Technical development

The current and expected price development for neodymium magnets significantly changes the basic conditions for the design of chocolate moulds and handling of magnets.

Therefore we will take the following approaches:

Reduce the number of magnets used. We have been following this approach for a while now. To continue to guarantee the impermeability of the moulds, new manufacturing techniques will be used and the moulds will be comprehensively tested in the design phase. Alternatively the use of weaker magnets will also be investigated.

Look into ways to reuse magnets. We prefer direct recycling as well as the reuse of valuable materials contained in products. By the end of 2011 we will complete the necessary preliminary work for recycling and will inform you of the details.

Provide system solutions where a significantly lower amount of magnets can be used.
To facilitate this, the framework system BLUEFLEX® has been available since Interpack 2011. In this system only the framework is equipped with magnets and is used for a wide range of items for incorporating the insertion moulds.

If you have any questions on this topic, please contact Peter Mayroth (Tel.: +49 (0) 8093-9086-210; e-mail: mayroth@hansbrunner.de) or your sales contact.