Market Research reports in an overview to one of their publications dated early 2020 that the rare earth elements (REE) market is expected to register a CAGR of over 7.5%, during the forecast period. The major factors driving the growth of the market studied are the high demand from emerging economies, the dependency of 'Green Technology' on rare earth elements, and companies focusing on R&D. On the flip side, the inconsistent supply and illegal mining of rare earth elements are some of the concerns affecting the growth of the studied market.
The rare earth metals segment dominated the market. It is likely to grow during the forecast period, with rising applications and surging demand from various industries.
The increasing scandium usage in aerospace applications is likely to provide opportunities for the studied market, during the forecast period. Asia-Pacific dominated the global market, owing to the increasing production of rare earth metals and rising demand from industries, such as consumer electronics, etc.
Key Market Trends
Magnets stand to be the largest application for rare earth elements. Magnets find extensive applications in various industries, such as electronics, automotive, power generation, medical, etc. Magnets are used in computer hard drives, microwave power tubes, anti-lock brakes, automotive parts, disk drive motors, frictionless bearings, power generation, magnetic refrigeration, microphones and speakers, communication systems, and MRI.
Industries, such as automotive, electronics, and healthcare, have been witnessing innovation and development, which are driving the production and growth in such industries. Though automotive production declined during 2018, the future of the market is positive, as the market growth is likely to be driven by the continuous innovation efforts being taken toward the development of new, lightweight, hybrid, and electronic vehicles.
In electronic industries, the innovation of advanced technologies and upgrading of the existing ones have been driving the growth of the market. Additionally, magnets are used in medical equipment, such as MRI machines, heart pumps, pacemakers, sleep apnea machines, and insulin pumps. The healthcare industry has been witnessing huge investments in the regions, such as Asia-Pacific and the Middle East & Africa, which may drive the demand for the aforementioned medical equipment. Hence, all such trends are expected to noticeably drive the demand for magnets, which is further projected to increase the demand for rare earth elements in the coming years.
The Asia-Pacific region dominated the global market share. With rising automotive production, increasing investments into the healthcare industry, and rising ceramic demand and production, the consumption of rare earth elements are also projected to increase noticeably in the region, during the forecast period. Automotive production is increasing in countries, such as India, Thailand, Vietnam, and Indonesia. Additionally, China, the world’s largest automotive producer, is majorly focusing on increasing the production and sale of electric vehicles in the country. For this purpose, the country has planned to increase the production of electric vehicles (EVs) to 2 million a year, by 2020, and 7 million a year, by 2025. In addition, India is witnessing investments in the automotive industry. For instance, in 2018, Hyundai planned an investment of USD 1 billion in India, by 2020. SAIC Motor also announced to invest USD 500 million in India, by 2020.
China has the world’s largest electronics production base. The country serves not only domestic demand for electronics but also exports electronic output to other countries. With an increase in the disposable income of the middle-class population in the country, and increasing demand for electronic products in the countries importing electronic products from China, the production of electronics is projected to grow.
Countries, such as India, South Korea, and Japan, are also some of the major countries that are producing electronic products. India has been witnessing investments in the electronics industry, which is driven by the government initiatives and incentives offered to increase electronics production in the country. Furthermore, the demand for, and production of ceramics is the highest in Asia-Pacific. The increasing ceramic demand from industries, such as aerospace and defense, energy, healthcare, and consumer goods, is driving the production in the ceramics industry. Hence, such market trends are likely to drive the demand for products, such as magnets, ceramics, glass, etc., in the region, which may boost the rare earth elements market in the coming years.
Competitive Landscape
The rare earth elements market is fragmented in nature, with numerous players holding insignificant share to affect the market dynamics, individually. Some of the noticeable players in the market include Avalon Advanced Materials Inc., Rare Element Resources Ltd, Eutectix, Shin-Etsu Chemical Company, and Alkane Resources Ltd, among others.
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