Dysprosium is one of the most strategically valuable of the heavy rare earths, and nearly all of its use is tied to high-end NdFeB magnets. Ordinary NdFeB magnets demagnetize noticeably once they exceed about 100 °C, whereas electric-vehicle traction motors, wind-turbine generators, and industrial servo motors run continuously at high temperature and strong vibration. By doping a few percent of dysprosium into the magnet grain boundaries, engineers greatly raise the magnetocrystalline anisotropy field and coercivity, so that the magnet holds its magnetization firmly at 150–200 °C—one could say that without dysprosium there would be no NdFeB motor with a temperature rating high enough for automotive use. Besides magnets, dysprosium is used in Tb-Dy-Fe magnetostrictive alloys, dysprosium metal-halide lamps, and as a dopant in certain laser crystals; its isotopes also strongly absorb neutrons and see limited use in nuclear-reactor control materials. Because global supply is highly concentrated, dysprosium has long been regarded as a critical metal.
Dy2O3 (dysprosium(III) oxide) is the principal oxide of dysprosium. It is a white powder with a faint yellow tinge and the direct raw material for producing dysprosium metal, dysprosium-iron alloy, and the dysprosium targets used for grain-boundary additions in NdFeB magnets; it is also used as a coloring additive in glass and ceramics, and as a deposition target for magneto-optical disk thin films. DyCl3 (dysprosium trichloride) is an intermediate in the solvent-extraction separation flowsheet, yielding dysprosium metal by calcium reduction or molten-salt electrolysis, which is then alloyed with iron and terbium for magnets and magnetostrictive materials. In industry, the elemental metal is almost never used directly; instead, dysprosium reaches magnet makers in the form of dysprosium-iron alloy, dysprosium targets, or dysprosium oxide powder, and is applied to the surface of the NdFeB magnet and diffused into the grain boundaries by grain-boundary diffusion, thereby achieving the largest possible coercivity gain with the least dysprosium.