Rare Earth Metals Market

Key Points Covered in Rare Earth Metals Market Survey

• Market estimates and forecast 2021-2031
• Key drivers and restraints impacting market growth
• Segment-wise, Country-wise, and Region-wise Analysis
• Competition Mapping and Benchmarking
• Brand share and Market Share Analysis
• Key Product Innovations and Regulatory Climate
• COVID-19 Impact on Rare Earth Metals market and how to Navigate
• Recommendation on Key Winning Strategies

Rare Earth Metals Market Historic Sales Compared to 2021-2031 Forecast Outlook

Demand for rare earth metals has been rising significantly due to favorable investment and government policies encouraging the expansion of automobile and electronic industries in various regions.

Driven by increasing sales of electronic vehicles and rapid urbanization across the globe, the rare earth metals market expanded at 3% CAGR during 2016-2020.

Electronic and hybrid vehicles are gaining immense popularity across developed regions due to rising environmental concerns and increasing per capita expenditure. This will continue driving the rare earth metal demand because of their application in vehicle production.

Rare earth metals such as neodymium and dysprosium are used in rare earth permanent magnets. These magnets find key applications in automotive batteries, conventional as well as hybrid.

Besides this, application in wind turbines, electronics, and oil & gas industries will continue rising owing to their high-performance and impressive magnetic strength. Spurred by these factors rare earth metals sales are expected to surge at 6% CAGR between 2021 and 2031.

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How Will Increasing Electronic Vehicle Sales Affect the Rare Earth Metals Market?

Hybrid and electronic vehicles are acquiring manufacturers’ and consumers’ attention across the globe. Rapid industrialization and increasing per capita expenditure in developing countries are creating conducive environment for electric vehicle sales.

Increasing application of rare earth metals in electronic vehicle batteries and other electronic components in the automotive industry will remain a chief growth driver. FMI underscores Asia Pacific as a lucrative pocket. Sales within the region will continue rising, especially in South Korea, China, and India.

With focus on reducing petroleum reliance on the rise, market players will have impressive prospects to capitalize on. Some of the leading manufacturers are seeking eco-friendlier alternatives to petroleum, which has caused paradigm shift to the production of electric vehicles.

As per the Office of Energy Efficiency and Renewable Energy, electronic vehicles tremendously reduce harmful emissions and support sustainable energy production. Focus on incorporating energy-efficient features will drive rare earth metal sales among vehicle manufacturers.

As per FMI's analysis, the rare earth metals sale is poised to reach 23,421 tons in 2031.

Application across Diverse Sectors to Continue Driving Rare Earth Metal Sales

Rare earth metals find application in a variety of industries such as automotive, electronic, consumer goods, and renewable energy. The renewable energy industry uses rare-earth magnets in wind turbines.

Permanent magnets are produced from rare earth metals such as neodymium and dysprosium. The magnets are used to separate the gearboxes for wind turbines, which reduces the weight and eliminates maintenance issues.

Rare earth metals are also used in catalyst systems, with cerium and lanthanum being the most preferred metals. These metals are mainly used in automotive catalytic converters and fluid cracking catalysts that are used in the oil & gas industry.

Demand for auto-catalysts can be attributed to implementation of stringent regulations across the globe intended to curb emission from vehicle and machinery, which is further boosting sales of rare earth metals.

Besides these, rare-earth magnets are also used in consumer goods such as smartphones, hard drives, and other electronic components, owing to the high magnetic strength and efficiency offered by these magnets.

How has COVID-19 Affected the Rare Earth Metals Market?

Due to the unprecedented COVID-19 outbreak, the rare earth metals market production has suffered unintended consequences. With China being the production and distribution hub for rare earth metals, operations in major refining, surface mining, manufacturing, and logistic activities were restricted.

As per the U.S. Geological Survey, China accounted for around 80% of the exports in 2019, although the exports declined in 2020 due to the pandemic.

Rare-earth metals are used in automobiles, home appliances, electronics, and various consumer goods. The interruption in the procurement of raw material and rare-earth-enabled components from China has affected these industries simultaneously.

However, with conscious efforts, the country has successfully contained the virus spread. With little to no restrictions, China is gradually resuming its mining and production activities, accelerating the production and export of rare-earth metals which will propel the growth of the market in upcoming years.

How Tightening Restrictions on Mining in China Affecting the Market Growth?

Excessive rare-earth mining in China has resulted in the infertility of soil and contamination of several water bodies. Abandoned mines also pose great environmental hazards as chemical residue leaches into groundwater.

Pools of wastewater collected in abandoned mines can also seep into local waterways. China Water Risk’s report on hazardous mining highlighted an abandoned mine from which untreated chemicals flowed into waterways in Ganzhou, a major city with a population of 8 million people.

These hazardous events have compelled the Chinese officials to shut down a large number of mines, especially the illegal ones. However, there are severe large-scale threats that remained unresolved.

Due to stringent restrictions and controlled mining in China, the pricing and quantity of rare earth metals will be affecting, causing roadblocks in rare earth metal market growth.

Country-wise Insights

How will Rare Earth Metals Sales Fare in the U.S.

As per ESOMAR-certified consulting firm Future Market Insights (FMI), the U.S. will exhibit a positive outlook in terms of growth, expanding at around 6.20% CAGR. The growth can be attributed to increasing consumer preference for electric vehicles.

In 2018, one of the leading electronic vehicle producers Tesla announced the incorporation of neodymium permanent-magnet-based car batteries in its latest models of Model 3 Long Range cars.

As the automotive industry is expanding rapidly in the U.S., with several automotive players operating in the region, the application of rare earth metals will also gain traction, augmenting the overall market growth.

Additionally, the U.S. is considered among the largest producers of nuclear energy, accounting for 3/10^th of the world’s electricity production. Heavy rare earth metal Yttrium is widely used in the production of energy and nuclear plants, hence driving sales in the market.

What are the Factors Driving Rare Earth Metals Demand in the U.K.?

With the rising popularity of electronic vehicles, many European car manufacturers such as BMW, Ferrari, Opel, and Renault are stepping into the EV market. Ferrari has also announced the launch of its first new-generation electric car by 2025.

As the electric vehicle market is gaining traction, the rare metals market will also witness steady growth, at 5.10% CAGR. Growth prospects in the rare earth metals market can also be attributed to increasing applications in metallurgy, magnets, catalysts, glass, and ceramics.

Will China Continue Dominating the Rare Earth Metals Market?

China is the leading producer and exporter of rare earth metals in the world, and also home to several automotive and consumer electronics manufacturers, anticipated to cross a valuation of US$ 161 Bn in 2021.

Rapid urbanization and increasing production in the automotive industry, especially in the electronic vehicle sector, are fuelling demand for rare earth metals in the country.

China accounts for impressive share in the global rare earth metals procurement. The application of rare earth metals in a variety of avenues such as electronics, ceramics, glass, and defense will provide lucrative opportunities to global players operating in the market.

Rising Demand for Consumer Electronics will Augment Market Growth in India

Increasing per capita expenditure and rising adoption of electronic vehicles in India will boost rare-earth metal sales in the country.

Apart from the automotive industry, growing demand from the electronics industry is also emerging in India. Rapid urbanization in the country, coupled with increasing purchasing power has created lucrative opportunities for players in the market.

Global players such as TCL, Thomson, BPL, and Xiaomi are expanding their production facilities in India to support the consumer demand, propelling sales of rare earth metals in the country.

Additionally, government initiatives like Digital India and Smart Cities Vision are promoting the use of electronics and high-bandwidth optic fibers to support the interconnectivity of devices like digital displays, mobile phones, and computers, which in turn will increase the demand for rare earth metals.

Category-wise Insights

Why is Neodymium the Most-Preferred Metal Type?

Neodymium segment is poised to surpass a valuation of US$ 2,200 Mn during the assessment period, leading the metal type segment.

The rare earth metal is widely used in the production of strong permanent magnets. Its high functionality and magnetic properties have made it possible to miniaturize various electronic devices such as mobile phones, microphones, and electronic musical instruments.

Neodymium also finds application in wind turbines, car windscreen wipers, special glass goggles for welding and glass blowing, laser pointers, and catalysts.

Why will Permanent Magnets Lead the Application Segment?

The demand for permanent magnets is gaining traction due to their application in various end-use industries, including consumer electronics such as computer hard disk drives, speakers, and headphones.

Along with consumer electronics, permanent magnets find application in servo motors, sensors, linear actuators, and automobiles. Rapid expansion of the automotive and electronic industry is a chief factor driving the segment over the assessment period.

Competitive Landscape

According to FMI’s analysis, prominent players in the rare earth metals market are emphasizing on expansion of production facilities to obtain a competitive edge in the market.

Top 5 players operating in the market include China Northern Rare Earth (Group) High-Tech Co., Ltd., Rising Nonferrous Metals Share Co., Ltd., Lynas Corporation, China Minmetals Corporation Limited, and Aluminium Corporation of China Limited.

Recent developments by leading players include mergers and acquisitions, increasing research and development initiatives, increasing focus on sustainable mining activities, and machinery upgradation, aimed at strengthening their foothold in the market. For instance:

• In August 2020, Lynas Corporation, Ltd. announced the installation of a new industrial-scale dryer at its Mt. Weld mine, improving the operational efficiency in the production by replacing manual drying of the concentrates, making the process faster and cost-effective.
• In June 2021, Arafura Resources Ltd. raised US$ 40 Mn through SPP (Share Purchase Plan) for its Nolan NdPr Project, focused solely on the sustainable extraction of Neodymium.

Scope of Report

Key Questions Answered in the Report

• What is the current rare earth metals market value?

  The rare earth metals market is valued at US$ 3,818.8 Mn in 2021.

• At what rate did the rare earth metals market grow between 2016 and 2020?

  The rare earth metals market expanded at around 3% CAGR between 2016 and 2020.

• What are the key trends driving rare earth metals sales?

  Increasing application of rare earth metals in EV batteries, coupled with regulations regarding hazardous mining are driving rare earth metals sales.

• Who are the leading players in the rare earth metals market?

  Leading players in the market include China Northern Rare Earth (Group) High-Tech Co., Ltd., Rising Nonferrous Metals Share Co., Ltd., Lynas Corporation, China Minmetals Corporation Limited, and Aluminium Corporation of China Limited.

• What is the market share of leading players in rare earth metals market?

  Top 5 players in the market will collectively account for approximately 40% of the global market share in 2021.

• What will be the demand outlook for North America rare earth metals market?

  North America rare earth metals market is anticipated to expand at around 6.20% CAGR during the forecast period.

• At what rate will rare earth metals demand rise in Europe?

  The rare earth metals market in Europe will expand at approximately 5.10% CAGR between 2021 and 2031.

• Which are the top countries driving the rare earth metals market sales?

  Top countries in terms of sales are digital breast tomosynthesis (DBT) equipment Japan, the U.K., the U.S., India, and Germany.

• What is the South Korea and Japan rare earth metals market demand outlook?

  FMI has forecast demand to continue rising in South Korea and Japan. Both countries are expected to account for 12% to 14% of the global value share in 2021.

Rare Earth Metals Market by Category

By Application Type:

• Catalysts
• Permanent Magnets
• Metallurgy & Alloys
• Polishing
• Glass
• Phosphors
• Ceramics
• Others (Fertilizers, Pigments, Defense, etc.)

By Metal Type:

• Neodymium
• Yttrium
• Dysprosium
• Terbium
• Europium
• Cerium
• Lanthanum

By Region:

• North America
• Latin America
• Eastern Europe
• Western Europe
• Asia Pacific excluding Japan
• Japan
• Middle East and Africa (MEA)