Rare Earth Elements Market - Forecast(2023 - 2028)

Overview

Rare Earth Elements Market is forecast to reach $5.52 billion by 2025, after growing at a CAGR of 10.7% during 2020-2025. Rare earth elements are a group of seventeen chemical elements that occur together in the periodic table. Permanent magnets are the largest end-user of the rare earth elements due to which the market of rare earth elements is expected to grow during the forecast period. A neodymium magnet, made from an alloy of neodymium, boron and iron is the most widely used type of rare-earth magnet. Rare earth elements are almost used in every advanced industrial product as they are a key component in the fluid cracking catalysts.The report covers Rare Earth Elements Market size by type and Applications, Rare Earth Elements Market share by top 5 companies and also the market share by start-ups during the forecast period.

Report Coverage

The report: “Rare Earth Elements Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the Rare Earth Elements Market.

Key Takeaways

• The increasing scandium usage in aerospace applications are likely to provide opportunities for the studied market, during the forecast period.
• Asia-Pacific dominated the global market, owing to the increasing production of rare earth metals and rising demand from industries, such as consumer electronics and others.
• Gadolinium is expected to be driven by its increasing demand for nuclear reactors. It is used as a neutron absorber in the fresh fuel to control and regulate the reactivity of the nuclear reactor core.
• Dysprosium is majorly used as an alloying agent in Neo permanent magnets. Neo magnets are widely used in various end-use industries including power generation, transportation, medical, aerospace, defense, and industrial.

By Type - Segment Analysis

Cerium segment held the largest share of the rare earth elements market in 2019. The growth in the automotive industry is anticipated to drive the demand for cerium, which in turn drives the rare earth elements market. Cerium is used as a catalyst in the automotive industry, catalytic converters, in exhaust systems to decrease emissions. It is also used in nickel-metal hydride batteries. The largest increases came from cerium demand in autocatalysts and polishing as well as the demand in magnets.

As per the data published by OICA, the overall sales of the automotive industry increased by 3% from 2016 to 2017. The increasing demand for automobiles enables the manufacturers to maintain the supply-demand balance, thus increasing the production. This is expected to boost the demand for catalytic converters as they are used to reduce harmful vehicle exhaust emissions, thereby propelling the utilization of rare earth elements over the forecast period. The growing demand for hybrid vehicles is expected to have a positive influence on demand for rare earth in the coming years. Despite a recent uptick, prices of cerium remain low as the element is an insignificant supply surplus.

By Application - Segment Analysis

Magnets segment held the largest share of the rare earth elements market in 2019. Magnets are used in various applications such as in linear actuators, computer hard disc drives, servo motors, sensors, and speakers & headphones. The increasing demand for magnets in consumer electronics, automobiles and turbines are expected to boost the consumption of rare earth elements. Additionally, magnets are used in medical equipment, such as heart pumps, sleep apnea machines, pacemakers, MRI machines, and insulin pumps. The healthcare industry has been witnessing huge investments in the regions, such as Asia-Pacific and the Middle East & Africa, which may drive the demand for the medical equipment which in turn drives the rare earth elements market.

As per the International Energy Agency, the global stock of electric cars was over 5 million in 2018 with more than a 63% increase from 2017. Rising demand for electric vehicles in order to reduce the CO2 emissions is expected to propel the use of magnets in the production of batteries.

Geography - Segment Analysis

Asia Pacific dominated the rare earth elements market with a share of more than 70% during the forecast period. Automotive industry and consumer electronics holds significance in Asia Pacific rare earth elements market. This is owing to rising application of rare earths in magnets for manufacturing batteries in the electric vehicles and polishing of television glass to smoothen the surface & reduce the weight of the product.

China is the world’s largest producer of rare earth elements and also a dominant consumer. According to U.S. Geological Survey, China is the world leader in the rare earth elements production followed by the US and Australia. China produced 120,000 metric tonnes of rare earth elements in 2019, followed by 15,000 and 20,000 metric tonnes by U.S. and Australia. Currently, around 80% of the precious metals used by the United States are imported from China. Even if the US’ production is one of the biggest in the world it's still insignificant compared to China’s rare elements production. Rare earth elements are mainly used in manufacturing of electronics products for domestic and export markets. It is possible that China's reluctance to sell rare earths is a defense of their value-added manufacturing sector.

Drivers – Rare Earth Elements Market

• Growing electronics demand

Rare Earths well suited for use in a variety of products, including cellphones, batteries, loudspeakers, lights, magnets, and even wind turbines. Rare earth elements are often key elements used in the creation of components used in everyday objects, such as fiber optics, light-emitting diodes (LEDs),  compact fluorescent lights, and are used as phosphors, catalysts,  and polishing compounds for illuminated screens on electronic devices, air pollution control and the polishing of optical-quality glass.

The production of consumer electronics is increasing worldwide, especially in APAC. According to India Brand Equity Foundation, the production of LCD/LED TVs in India reached 16 million units in 2018 from 8.75 million units in 2015. This is likely to fuel the utilization of rare earth elements such as lanthanum, cerium and praseodymium over the forecast period.

Challenges – Rare Earth Elements Market

• Growing trade tension

Amid the ongoing trade war with the US, the Chinese development and reform commission is currently developing new state policies on rare earth elements, and intends to make them public as soon as possible. China dominates the global supply chain for rare earths as it produces more than 80 % of them. The US relies on China for about 80% of its rare earths supplies. 

In 2010, China significantly restricted their rare earth exports. That was done to ensure a supply of rare earths for domestic manufacturing and for environmental reasons. This shift by China triggered panic buying, and some rare earth prices shot up exponentially. In addition, United States, Japan and the European Union complained to the World Trade Organization about China's restrictive rare earth trade policy.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the rare earth elements market. In 2019, the market of rare earth elements has been consolidated by the top five players accounting for xx% of the rare earth elements market share. Major top 10 companies of rare earth elements market are Shin-Etsu Chemical Co. Ltd., China Minmetals Rare Earth Co. Ltd., China Northern Rare Earth (Group) High-Tech Co., Ltd., Iluka Resources Ltd, Molycorp Inc., Lynas Corporation Ltd, and Alkane Resources Ltd. among others.