United Electric Supply
Urgent Bulletin
Rare Earth Oxides are mined from the
earth and processed into useable components found in many modern
consumer products. To us, they are a critical component in the
production of the ‘white’ phosphor coatings used to create
various color in linear and compact fluorescent lamps, as well as
LED’s.
China controls nearly 95% of the world’s rare earth mineral
needs. During the past months, rare earth mineral markets have
experienced unprecedented growth. Additionally, Chinese export
duties encourage their own domestic production and use of these
minerals. The end result is a tightening of supply and soaring
prices. Since February, phosphor oxides along with other rare
earth metal prices have skyrocketed over 800%.
To compound the problem, the lighting industry only
consumes approximately 10% of the Chinese export of these oxides,
putting our industry at an extreme disadvantage.
Our lamp manufacturers have assured us that they are
working diligently to manage and control costs. However,
hundreds of fluorescent lamps have already been affected by dramatic
cost increases in various degrees according to individual lamp
characteristics. We are beginning to experience extended lead
times and shortages associated with this sudden rise in
prices, and some industry experts estimate this to continue through
2012.
United Electric Supply is working with our strategic
suppliers to address this rapidly accelerating availability and
pricing crisis by increasing and/or controlling our inventories and
managing our costs. We have just updated our pricing, which includes
the two most recent increases. From this point on, we will all be
subject to increases as they develop.
We will keep our staff informed of new information, and
make them aware of alternatives. As true partners, we ask you
to help by assessing and planning your lamp purchases and deliveries
for what has become a substantial challenge for all of us.
It is extremely important that you please carefully note
all of the terms and conditions of our Lighting quotations, as there
may be very specific requirements and restrictions throughout this
difficult period.
This is an unprecedented global crisis in the lighting
Industry, and United Electric Supply is determined to support you in
every way we can toward our mutual success.