Global Rare Earth Elements Market - 2023-2030

Market Overview

Rare Earth Elements Market size was worth US$ XX million in 2022 and is estimated to show significant growth by reaching up to US$ XX million by 2030, growing at a CAGR of 9.4% within the forecast period (2023-2030).

Rare earth elements are seventeen metals and compounds grouped in the periodic table with specific properties. Rare earth is either produced as primary products during extraction or as by-products during the extraction of some other principal elements such as uranium and thorium. Most of the firms' operating activities are located in China, with other firms based out of U.S., Australia and Canada.

State-owned firms enjoy complete dominance over the rare earth industry in China and with the Chinese government's market consolidation plan, it is expected that the state's role to get stronger. Mergers & acquisitions and new capacity expansions are among the key strategies adopted by the market's major players. Because of volatile rare earth prices, key players are subject to intense trade speculation.

The factors that play a major role in determining the competitive edge of a company in the rare earth market are: resource base in terms of volume, resource base in terms of quality, technological edge in mining and extraction techniques, access to federal incentives, R&D expertise, customer reach and the extent of vertical integration, joint ventures and strategic partnerships, environmental regulations imposed on operations, trade barriers in the country of operations and expertise and availability of skilled manpower.

Market Dynamics

Increasing usage of direct-drive turbines for wind energy production drives the market share for rare earth elements.

Increasing usage in direct-drive turbines for wind energy production is driving the market share for rare earth elements

Wind energy has become a cost-effective and clean solution for electricity generation. It is termed the clean alternative to non-renewable fuels. Furthermore, wind energy farms provide an alternative method to generate electricity with reduced emission of greenhouse gases. Wind energy generation is expected to show incremental market growth in the future because of growing federal incentives for production and regulations on emissions.

Wind turbines involve the usage of large gearboxes for electricity generation. Direct-drive permanent magnet generators replace conventional gear-driven turbines because of the latter's efficiency and lower maintenance downtime. Some direct-drive turbines are 25-30% more efficient than gear-driven turbines.

A typical large wind turbine requires nearly two tons of high-strength magnets, usually alloys of boron, iron and didymium metal. Each MW of turbine uses about half a ton of permanent magnet and, in turn, involves using 150-200 kg of didymium metal, a mixture of praseodymium, dysprosium and neodymium.

The installed wind power capacity as of 2019 stands at 650.8 GW, 59.7 GW added in 2019, Leading wind experts from around the world.

The share is expected to rise to 8% because of aggressive expansion activities in China and Europe. China announced plans to raise its wind power capacity to 200 GW by 2020. This demand primarily comprises direct-drive turbines and will consume the entire supply of neodymium and praseodymium metal produced worldwide by 2020.

Demand-supply outages and the rise of substitutable materials create a huge challenging atmosphere for the growth of rare earth elements

The global supply of rare earth is heavily concentrated in certain geographies while the demand is widely spread worldwide. As a result, trade plays a vital role in reaching rare earth oxides to various end-use industries worldwide. The current production is mainly restricted to U.S. and China, with little produced in other geographies.

As a result of supply disruption overdependence on a limited number of mining sites in these countries, any disruption to production often results in huge price fluctuations and challenges the availability of various sensitive end-uses. Environmental concerns, enactment of federal quotas and rising production costs often result in the closure of small mining sites in these countries.

It leads to the disruption of supplies and exports to key importing countries, which either rely on recycling or switch to substitutable materials. For instance, titanium and vanadium modified with nickel, chromium and manganese can be used as substitutable metals for rare earth in NiMH batteries. In addition to the above, the rapidly growing end-use demand outpaces supply growth due to a lag period involved in the commercial development of reserves. This rising deficit only propels a serious evaluation of substitutable materials.

COVID-19 Impact Analysis

The global rare earth elements market has slightly declined due to the COVID-19 pandemic, as manufacturing industries were closed. Several countries globally have restricted production activities during the COVID-19 pandemic. Further, the growth of electronic devices and automobiles declined due to low demand from April to June 2020. As per International Energy Agency, during January to April 2020 COVID-19 pandemic period, the sale of cars contracted by 15% over the year compared to 2019, while electric sales for passenger and light-duty commercial vehicles also declined broadly as compared to 2019 levels.

In addition, the demand for rare earth elements slightly increased in August 2020 as several leading manufacturers started producing electronic devices, electric vehicles, etc. The leading manufacturers were facing a lack in the supply of raw materials. Further demand is increased suddenly due to the increasing sale of portable electronic devices such as smartphones, speakers, etc., due to a surge in demand in developing countries as several institutions, schools and colleges shifted into online classes, which have propelled the demand for smartphones.

Segment Analysis

The global rare earth elements market is segmented by type, source, application, end-user and region.

The growing demand for compounds in applications such as catalysts, polishing agents, phosphors and magnets in various growing end-use industries is boosting the segment's growth

The global rare earth elements market is segmented based on type: metal and compounds. The compounds dominate the market of the mentioned types. Similar to rare earth metals, rare earth compounds are also found in niche volumes in the earth, which may or may not have rare earth metals. Rare earth elements are also used in compounds in various commercial applications. Cerium compounds, carbonates, chlorides and oxides are rare earth compounds. These compounds are used as catalysts, polishing agents, phosphors and magnets in various growing end-use industries

Compounds evolved as the largest product category in the global rare earth elements market, accounting for a share of 89.22% of total sales revenue in 2020. The rapidly growing sales of electronic components led to the growth of rare earth compounds across the globe. Further, the evolution of personal wearable electronics led to new growth avenues in rechargeable batteries, driving the need for rare earth compounds.

Geographical Analysis

The growing demand for rare earth can be attributed to the expanding automotive industry in North America

The growing demand for rare earth can be attributed to the expanding automotive industry in North America. For example, in 2018, Tesla announced using neodymium in its Model 3 Long Range cars. The introduction of rare earth metals is anticipated to spur the demand for neodymium over the forecast period.

U.S. dominates the North America rare earth Elements (MIM) market. The U.S. is the second largest consumer of rare earth metals after China. These elements are predominantly used in catalyst compositions as catalytic converters and refinery applications.

The country has significant unexploited reserves and relies on production from the Mountain Pass mine in California and on imports that cater to domestic demand. U.S. Department of Energy reported that in 2018 U.S. imported all of the REEs it consumes, about 80% of which come from China. In 2018, the DOE informed that the nation imported around US$160 million rare earth compounds and metals, excluding some such as scandium and yttrium.

However, the real economic cost of REEs is so deceptive that the nation imports nearly all of its REEs in the form of finished goods rather than raw materials. When put in these terms, U.S. Department of Energy projected that U.S. imported US$ 2.6 trillion of finished goods containing REEs in 2018.

Competitive Landscape

The global rare earth elements market is highly competitive with local and global key players. The key players contributing to the market's growth are China Rare Earth Holdings Limited, Arafura Resources Limited, Lynas Corporation, Ltd., Avalon Advanced Materials Inc., Alkane Resources Ltd, Shin-Etsu Chemical Co. Ltd, Canada Rare Earth Corporation, Iluka Resources Ltd., Eutectix LLC, Rare Element Resources Ltd and others.

The major companies are adopting several growth strategies, such as product launches, acquisitions and collaborations, contributing to the global growth of the rare earth elements market.

For instance, in December 2019, USA Rare Earth and Australian Rare Earth Company Arafura Resources entered a strategic relationship. Under a letter of intent, Arafura will send Heavy Rare Earth (HREE) concentrate from Nolans for processing at USA Rare Earth's Colorado pilot plant.

LYNAS CORPORATION, LTD.

Overview: Lynas is one of the world's largest producers of rare earth materials. It has two major operations: a mining and concentration plant at Mount Weld, Western Australia and a refining facility at Kuantan, Malaysia. The company's rare earth oxides are mined and initially processed at their Mt Weld Concentration Plant. Lynas Rare Earths are used in many high-tech and future-facing industries, including electronics, wind turbines, catalytic converters and electric and hybrid motor vehicles.

Product Portfolio: Rare earth products: Neodymium and Praseodymium (NdPr) used in magnets, Lanthanum (La), Cerium (Ce) and Mixed Heavy Rare Earths (SEG) are the high-quality products included in their product portfolio.

Key Development

On January 2021, Lynas Corporation inked an agreement with U.S. Government to build a light rare earth separation plant in Texas. The plant will process material directly sourced from Lynas' cracking and leaching plant under development in Western Australia. It is expected to produce nearly 5000 tonnes of rare earth products annually, including around 1250 tonnes of neodymium-praseodymium (NdPr).

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• Visualize the global rare earth elements market segmentation by type, source, application, end-user and region, highlighting key commercial assets and players.
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The global rare earth elements market report would provide approximately 61 market data tables, 55 figures and 212 pages.

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