Fluorescent prices rise again as earth misery continues

Fluorescent lamp prices are still climbing as supplies of rare earths remain tight. With stock dwindling, more upheaval in the production on energy-efficient light sources is expected

In January Philips increased the prices of its fluorescent tubes by 20 per cent. On the same day Sylvania put the price of T12s up by 15 per cent. As pressure continues to pile on, Philips has announced further price increases set for 1 February of between five and 15 per cent.

The letter sent out to customers explaining the changes states: ‘It has been confirmed that the higher manufacturing costs that Philips was subject to in 2011 will continue throughout 2012. In order to maintain a sustainable lighting business, it is necessary for further price increases to be applied to our fluorescent-based products.

More price hikes are expected to hit over the coming months from other manufacturers, according to our source.

A report published by the US Department of Energy warned that, of the elements assessed, five rare earths have been classed will be in short supply until 2015 at least. These are: dysprosium, terbium, europium, neodymium and yttrium. Shortages of these elements are expected to affect the availability of fluorescent lighting over the next few years.

The report said: ‘As lighting energy efficiency standards are implemented globally, heavy rare earths used in lighting phosphors may be in short supply.’

For many manufacturers, CFLs are manufactured in China and exported while it is cheaper to ship over the raw materials for linear tubes and construct them at home. The report said: ‘This means that in a tight supply situation with increasing demand for the heavy rare earths contained in phosphors, domestic LFL manufacturers may have difficulty obtaining rare earth phosphors.’

Global attempts to prevent the sale of incandescent lamps are set to increase demand for fluorescents as well as a push towards other eco technologies. Fluorescent lamps contain phosphors made with europium, terbium and yttrium, three of the five heavily constrained materials.
The report states that the projected increase in demand for CFLs and energy-efficient linear fluorescent lamps suggests ‘upward price pressures for rare earth phosphors in the 2012-2014 timeframe’.

‘In the future, LEDs (which are highly efficient and have much lower rare earth content) are expected to play a growing role in the market, reducing the pressure on rare earth supplies.’

Halogen incandescents, LED and OLEDs use little or no rare earths. There is speculation that if the rare earth situation continues as expected it will force further development in other areas.

Lamp prices: more pain to come

The industry is bracing itself for another round of fluorescent lamp price hikes as China totally blocks rare earth supply.

China’s largest rare earth producer has now cut off supply.

The Inner Mongolia Baotou Steel Rare-Earth Group, which accounts for nearly half of the world’s light rare earth production, has suspended smelting and separation work for a month. It said in a filing with the Shanghai Stock Exchange that the move was aimed at ‘balancing supply and demand’.

Since summer, some rare earth prices have dropped after recent stark rises. The company wants to use its market power to drive costs back up. RBS estimates a month-long suspension will remove about 5,000 tonnes from the global market.

Sam Berridge, rare earth analyst at RBS, said: ‘We would expect a month-long shutdown from the largest producer in the world to affect prices fairly quickly.’

Reports say Baotou also plans to buy rare earth metals in an attempt to further in ate prices. The company controls 60 per cent of China’s production of the materials after the Chinese government merged 35 local companies into the business. The cost of phosphor has skyrocketed this year, from about £20 a kilo in February to over £400. This has triggered a series of price increases on various fluorescent lamps.

Prices of fluorescents set to rocket again !

As the cost of fluorescent lamps continues to rise, wholesalers and distributors have contacted Lux to voice their concerns.
A major supplier has said they was unable to give customers prices on future orders. They said: ‘If the manufacturers were savvy, they’d buy from two sources. That’s what we do.’

Supplies of T8s are dwindling, with distributors struggling to get hold of tubes from the leading manufacturers, Manufacturers deny profiteering and are considering alternatives.