My cerium belt won't track correctly on my sander, is it defective?

No.

The cerium impregnated belts are made on a very thin film backing to allow enough pressure to activate the cerium in the Trizact structure. Because of this thinner backing, the cerium belts are going to be a bit looser on your sander than your typical silicon carbide or other cloth backed belts. 

You may need adjust the tension on your belt sander in order to accommodate the cerium impregnated belts, but don't adjust the tension too tightly or you'll stress the belt joint unduly and you can break the joint. 

If your belt sander is relatively new, then your drives wheels should have an adequate enough crown on them to keep the cerium belt tracking nicely. If you have an older belt sander, the crown on your wheels may have worn down over time. You may not notice it's absence with the thicker silicon carbide belts, but the lack of a crown on your wheels will be very noticeable with the cerium impregnated belts. You can either have your drive wheels re-machined or you can even add a crown by using masking tape on the wheel to build up a slight crown in the middle of the wheel.