by Rare earth metals refer to a group of 17 chemical elements – lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium. They play a crucial role in the manufacturing of various electronic components and equipment due to their magnetic, luminescent and electrochemical properties. Products like advanced armor materials, hard drives, catalytic converters, rechargeable batteries, lighting, magnets and electric vehicles widely utilize rare earth metals. Rapid expansion of electric vehicles is bolstering demand for rare earth metals as they constitute key components of electric vehicles such as traction motors, batteries and sensors. For instance, an average electric vehicle requires around 4 kg of rare earth metals in its motor. The global rare earth metals market is estimated to be valued at US$ 4710.8 Mn in 2023 and is expected to exhibit a CAGR of 6.2% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The growing electric vehicles industry is one of the key factors driving the global rare earth metals market. According to the International Energy Agency, the global electric car stock exceeded 10 million in 2020 and electric car sales increased by over 40% year-on-year. Countries worldwide are enforcing stringent emission regulations and providing subsidies to promote electric vehicles adoption, which will significantly increase the demand for rare earth metals used in electric vehicles production over the forecast period. Another factor fueling the market growth is increasing usage of rare earth metals in consumer electronics. Smart devices like smartphones, tablets and laptops extensively utilize rare earth metals in speakers, screens and batteries. Rising disposable income and growing electronics needs of the expanding global population will enhance the consumption of rare earth metals in the consumer electronics sector during the forecast period.
Segment Analysis
The rare earth metals market is segmented into light rare earth metals and heavy rare earth metals. The heavy rare earth metals segment is currently dominating the market and is expected to continue its dominance over the forecast period. This is owing to increasing demand for heavy rare earth metals such as dysprosium and terbium from growing permanent magnet industry. Permanent magnets containing heavy rare earth metals find major applications in electric vehicles, wind turbines and consumer electronics.
PEST Analysis
- Political: Trade restrictions imposed by the USA on China to curb its monopoly may present new opportunities for other rare earth suppliers to increase production.
- Economic: Growing industries such as automotive, electronics and renewable energy are driving demand for rare earth metals. The supply chains of these industries depend on affordable and stable supply of rare earth metals.
- Social: Increasing environmental regulations around mining activities may increase production costs for rare earth metals. Local communities are also concerned about impacts of rare earth mining on environmental degradation and livelihood.
- Technological: Rare earth metals continue to gain importance in technologies pivotal for energy transition such as batteries for EVs, generators in wind turbines and energy efficient Lighting. Development of rare earth recycling technologies can augment supply.
Key Takeaways
The global rare earth metals market is expected to witness high growth owing to increasing demand from automotive, electronics and renewable energy industries. From a regional perspective, China is expected to continue dominating the rare earth metals market over the forecast period. China accounts for over 90% of rare earth metals production globally. It has an advantage of having the world’s largest rare earth reserves and is a low-cost producer.
Key players operating in the rare earth metals market are China Northern Rare Earth (Group) High-Tech Co., Ltd, RISING NONFERROUS METALS CO., LTD, China Minmetals Rare Earth Co., Ltd, Aluminum Corporation of China Limited, Lynas Corporation, Ltd., Beijing Zhongke Sanhuan High-tech Co. Ltd., Jiangxi Tungsten Industry Group Co. Ltd., Arafura Resources Ltd., and Alkane Resources Ltd. Chinese companies dominate the global rare earth metals supply. The leading players are making efforts to diversify and expand production footprint outside China to mitigate risks of supply disruption.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
