Rare Earth Metals Market Forecast: Insights into Future Growth Prospects

Rare Earth Metals Market Forecast: Insights into Future Growth Prospects

Rare earth metals are a set of 17 chemical elements in the periodic table, specifically the 15 lanthanides plus scandium and yttrium. Rare earth metals are critical materials for manufacturing a wide range of advanced technologies and have diverse applications in consumer electronics, defense industry, medical devices, hybrid/electric vehicles and more. Due to unique properties of rare earth metals like magnetism, luminescence & catalytic properties, products including permanent magnets, lasers, phosphors & catalysts are manufactured using rare earth metals.

The global rare earth metals market size 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, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:

The rare earth metals market is expected to witness significant growth owing to increased demand from automotive industry. Rare earth metals such as neodymium, praseodymium, dysprosium and terbium are key materials in manufacturing high strengthpermanent magnets that are extensively used in electric vehicles (EVs) for traction motors. With rapid adoption of EVs across the globe due to stringent emission norms and incentives on electric vehicles, demand for rare earth metals from automotive industry is projected increase substantially over forecast period. Further, countries like China and US are heavily investing in development of domestic electric vehicle supply chain including rare earth mining, which will drive the rare earth metals market growth over coming years.

Porter's Analysis

1.Threat of new entrants: The rare earth metals mining industry requires large capital investments and has environmental regulations, which limit the threat of new entrants.

2. Bargaining power of buyers: Individual buyers have weak bargaining power due to the limited number of suppliers. However, larger volume buyers can negotiate better prices.

3. Bargaining power of suppliers: A few countries such as China dominate rare earth metal supply, giving them strong bargaining power over buyers.

4. Threat of new substitutes: There are limited substitutes available for rare earth metals due to their unique properties. However, recycling can increase the supply of secondary rare earth metals.

5. Competitive rivalry: The global rare earth metals industry is dominated by China. Other large players include MP Materials, Lynas Corporation, and Arafura Resources, leading to high competitive rivalry.

SWOT Analysis

1. Strengths: Growing demand for rare earth metals from electric vehicles and electronics is driving market growth.

2. Weaknesses: China controls the majority of rare earth metal reserves and production, exposing other nations to supply risks. High costs associated with mining and processing rare earth metals.

3. Opportunities: Increasing investments to develop rare earth metals deposits outside of China. Rising recycling rates of rare earth containing products can boost secondary supply.

4. Threats: Stringent environmental regulations around rare earth mining can increase production costs. Volatility in rare earth metal prices impacts investments.

Key Takeaways

The global rare earth metals market is expected to witness high growth over the forecast period driven by end-use industries such as electronics and electric vehicles. The global rare earth metals market size 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.

Regional analysis: North America and Europe are fastest growing regions, led by the U.S. and Australia which are developing their rare earth mining industries to reduce dependency on China. China dominates global rare earth supply and accounts for over 50% of rare earth metals reserves. Australia and Malaysia are other major producers.

Key players: Key players operating in the rare earth metals market are MP Materials, Lynas Corporation, Arafura Resources, II-VI Incorporated, Alkane Resources, etc. MP Materials owns the Mountain Pass mine in the U.S, the only operating rare earth mining and processing site outside of China currently. Lynas Corporation operates the Mt Weld mine in Australia.