One of the important raw materials of Ferrite magnet is Strontium Carbonate
On March 6, 2025, a serious fire broke out at the Kandelium plant in Mexico. Kandelium is the largest overseas supplier of Strontium Carbonate, with an annual production capacity of 40,000 tons, accounting for 11% of global production. Most of its production capacity is exported to China, accounting for 70% of China’s imports.
The fire caused serious damage to the factory facilities and inventory, making it unable to resume production in the short term, and downstream customers have been notified to stop supply. This further exacerbated the supply gap in the global strontium carbonate market, especially in China, and had a significant impact on the rise in strontium carbonate prices. It is one of the core factors for the surge in strontium carbonate prices in 2025. According to CCTV.com, the fire affected at least four companies. The fire started in an open space and spread due to strong winds, affecting Kandelium’s strontium carbonate production plant in Nuevo León, Mexico.
Considering that the fire was very serious and it would take a long time to resume production, Strontium Carbonate is expected to be in serious supply and demand shortage. This has led to a substantial increase in the price of Ferrite magnet.
Magnetic materials are the largest source of demand for Strontium Carbonate, and downstream cost sensitivity is low.
Strontium carbonate is mainly used in the downstream fields of magnetic materials (50%), metal smelting (20%), fireworks (10%) and ceramics (17%). Among the downstream costs, the cost of strontium carbonate accounts for less than 10%, providing flexibility and space for price increases. According to association data, the domestic production of strontium carbonate from 2021 to 2023 will be about 160,000 to 180,000 tons, and the import volume will be about 20,000 tons/year (about 2/3 of the domestic strontium carbonate imports come from Mexico).
The supply chain of this round has shrunk more seriously than the previous (increased to 28,000 in 2021): strontium carbonate was already in a tight supply and demand situation before, and the fire will cause the supply and demand to be completely out of control. The domestic production capacity is 180,000 tons, of which Hebei Xinji Chemical Industry Factory previously stopped production of 60,000 tons, causing the industry to change from oversupply to tight balance, and the price rose from 7,500 to 14,000. The Kandelum fire will reduce production capacity by 40,000 tons again (most of which is imported into China), which will cause the industry supply gap to reach 15%+. It is expected that the price of strontium carbonate in this round will break the historical high (more than 30,000).