Following export restrictions imposed on rare-earth minerals by China in the summer, the soaring price of cerium oxide -- a key material used as a polishing slurry for high-precision optics -- is causing havoc in the optics supply chain.
According to industry sources, one company has already been forced to shut down as it awaits supplies of the material, while others may introduce a cerium surcharge if the situation does not change. Suppliers of cerium-based products are unable to guarantee prices beyond more than a few days.
China has been able to corner the rare-earth market over the past 15 years by "dumping" prices, says Robert Castellano, an industry analyst at The Information Network. "The price was so low that they drove everyone out of the market, and they are now essentially the sole supplier. Now that they have achieved dominance they can dictate the price."
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