As per ESOMAR-certified consulting firm Future Market Insights (FMI), the global rare earth metals market is poised to witness steady growth at around 6% CAGR, exceeding the market valuation of US$ 3,818.8 Mn between the forecast period 2021 and 2031.
Growing consumer preference towards electronic vehicles and rapid expansion of the automotive and electronic industry are emerging as chief factors augmenting the growth of the rare earth metals market.
Presence of high-growth potential industries including consumer goods and renewable energy in developed countries such as the U.S., the U.K., and Germany will propel sales in the market.
Permanent magnets used in wind turbines are produced from rare earth metals such as dysprosium and neodymium. Considering this, a steady expansion of wind turbine installations worldwide will create conducive environment for rare earth metals sales.
Besides this, the market will continue gaining from application in manufacturing batteries installed in electric vehicles. With electric and hybrid vehicles sales forecast to gain momentum in the coming years, the demand for rare earth metals with consistently rise.
Rising digitization and urbanization in developing countries such as China, India, and South Korea is boosting the demand for consumer electronics, which in turn is fostering sales of rare earth metals.
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As per FMI, Asia Pacific excluding Japan will continue exhibiting high growth within the global market. Within the region, the Neodymium segment is likely to gain remarkable 270 basis points by 2026 in comparison to that of 2016.
China, trailed by India, will emerge as the dominant market for rare earth metals in Asia Pacific. The continued surge in mining activities, besides expansion of electronics and automotive sectors will support growth in the country.
Key Takeaways from FMI’s Rare Earth Metals Market Study
- Neodymium will emerge as the most preferred metal type throughout the forecast period.
- Permanent magnets will dominate the application-type segment.
- The U.S. will exhibit high demand due to rapid expansion of automotive and renewable energy industries.
- China will lead the rare earth metals market owing to the presence of major players and increasing production of consumer electronics.
- The U.K. will experience steady growth, which is attributable to increasing demand by various end-use industries.
- South Korea and Japan will account for nearly 14% of the market share.
“Companies operating in the market are adopting sustainable mining policies to gain competitive edge. Besides this, they are seeking approval from international organizations to aid capacity expansion,” says the FMI analyst.
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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 are some leading players operating in the rare earth metals market.
Key strategies being incorporated by manufacturers include emphasis on sustainable mining practices, research, and development regarding efficient use of metals, industry-grade machinery installations, and expansion of procurement facilities. For instance:
- In December 2019, Lynas Corporation joined hands with Kalgoorlie Boulder, based out of Australia, to open a new processing plant for processing materials mined from the nearby Mt Weld lanthanide deposits.
- In June 2021, Arafura Resources Ltd., received approval and a Letter of Support from the Northern Australian Infrastructure Facility (NAIF) for the inclusion of its Nolan NdPr sites as a statutory defined area of North Australia, enhancing the sustainable mining practices in the region.
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.
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More Insights on the Rare Earth Metals Market
In its latest report, FMI offers an unbiased analysis of the global rare earth metals market, providing historical data for the period of 2016-2020 and forecast statistics for the period of 2021-2031. In order to understand the global market potential, its growth, and scope, the market is segmented on the basis of application type (catalysts, permanent magnets, metallurgy & alloys, polishing, glass, phosphors, ceramics, and others (fertilizers, pigments, defense, etc.) metal type (Neodymium, Yttrium, Dysprosium, Terbium, Europium, Cerium, Lanthanum) across seven major regions (North America, Latin America, Eastern Europe, Asia Pacific excluding Japan, Western Europe, Japan, and Middle East & Africa)