Material surcharge

Background information regarding Material surcharge for servo synchronous motors

For servo synchronous motors magnets are used containing the raw materials neodymium and dysprosium. Due to the shortage on the world market, the prices for these raw materials belonging to the rare earth group have dramatically increased since the end of 2010. This price development has caused a substantial increase in the costs of the magnets and thus of the servo synchronous motors. In order to take account of these significantly increased costs, a material surcharge (MS) will be introduced. This MS does not contain any other extra  charges, it merely corresponds to the additional costs of the magnets caused by the procurement situation. At the moment it is not possible to forecast the future development of the prices. It is, however, to be feared that the rare earths will become even scarcer and the prices thus will continue to rise. Should the prices fall below the mentioned basic value for March 2011 even „negative price surcharges“ and thus markdowns could be possible. The following diagram shows the price development since January 2010.