by Rare earth metals refer to a group of 17 metallic elements which include scandium, yttrium and lanthanides. These metals have unique magnetic and luminescent properties making them indispensable for various high-tech applications. Common rare earth metals used in manufacturing includes neodymium, cerium, lanthanum, praseodymium, gadolinium and samarium. They play a vital role in the production of consumer electronics, automotive components, military equipment and clean energy technologies. Rare earth metals are widely used in smartphones to manufacture speakers, microphones, cameras, vibration motors and micro-sized electric motors that are ubiquitous in consumer-centric applications. Their role is indispensable in manufacturing displays for LCD/LED screens, semiconductors and permanent magnets used in drives.
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 rising demand for rare earth metals from the consumer electronics industry is expected to drive the growth of the market over the forecast period. As highlighted in the heading, rare earth metals like neodymium, praseodymium and dysprosium are extensively used in the production of speakers, micro-motors, cameras and vibration motors for smartphones and other consumer devices. The booming smartphone industry has fuelled consumption of rare earth metals over the past decade. According to forecasts, annual smartphone sales are projected to surpass 1.8 billion units by 2024 driven by transition to 5G networks and increased affordability in developing regions. The transition to 5G is likely to further accelerate consumption of rare earth metals as 5G networks and devices require more complex electronics and optics.
The lack of rare earth metal substitutes also contributes to the robust demand outlook. Rare earth metals have unique electro-magnetic and optical properties that cannot be replicated by any other element. They play an irreplaceable role in multiple manufacturing applications mentioned earlier. While recycling can partly fulfill future requirements, a long-term reliable supply of rare earth metals remains important to support continued growth of high-tech industries. Ongoing initiatives to develop new projects and expand existing rare earth mines are expected to ensure steady supply and mitigate supply chain risks. Together, the irreplaceable nature of rare earth metals and their rising use in electronics are the key drivers propelling the rare earth metals market.
Segment Analysis
The rare earth metals market is segmented into light rare earth metals and heavy rare earth metals segments. The heavy rare earth metals segment dominated the market with over 60% share in 2022. This is because heavy rare earth metals such as dysprosium, terbium and yttrium are used in permanent magnets which have wide applications in wind turbines, electric vehicles and consumer electronics. The demand for these metals is growing significantly owing to rising adoption of green technologies.
PEST Analysis
- Political: Governments across regions are promoting usage of rare earth metals by providing subsidies for electric vehicles and renewable energy projects. This is positively impacting the market.
- Economic: With rapid economic development of emerging economies and focus on clean technologies globally, demand for rare earth metals from application industries is surging. This provides opportunities for market growth.
- Social: Rising environmental concerns are driving adoption of eco-friendly technologies. This increases usage of rare earth metals in applications such as wind turbines and electric vehicles.
- Technological: Ongoing R&D is helping reduce usage of rare earth metals in existing applications and development of alternatives. However, technological advancements in electronics and renewable energy sectors continue to support market expansion.
Key Takeaways
The global rare earth metals market is expected to witness high growth over the forecast period driven by rapid expansion of the electronics and automotive industries. The global Rare Earth Metals Market is estimated to be valued at US$ 4710.8 Mn in 2024 and is expected to exhibit a CAGR of 6.2% over the forecast period 2023 to 2030.
Asia Pacific currently accounts for over 70% share of the global rare earth metals market led by China. The region is expected to continue its dominance owing to presence of major rare earth metals producers and huge demand from various end-use industries in developing Asian countries. North America is also emerging as a major regional market for rare earth metals due to growing electric vehicles sales and investment in clean energy projects in the US and Canada. Several automakers in the region have announced plans for electric fleets which is creating demand for rare earth metals.
Key players:
Key players operating in the rare earth metals market are Lynas Corporation, Arafura Resources, Alkane Resources, Iluka Resources, and Rainbow Rare Earths. These companies have significant rare earth metals reserves and production facilities.
