Rare earths market outlook to 2026
February 21, 2017
Roskill Information Services Ltd, London, recently published its market outlook for rare earth metals to 2026 with the focus on applications in the permanent magnet and catalyst market sectors. Roskill states that catalysts will continue to drive growth in the light rare earth elements lanthanum and cerium, whilst neodymium, praseodymium and dysprosium will see growth in permanent magnets.
Supply of some rare earths is said to be far greater than that of others as a result of production methods, and there is a discontinuity between supply and demand across the different elements. Despite growth in catalyst demand (and, to a lesser extent, polishing and nickel metal hydride battery), cerium and lanthanum will remain in substantial surplus to 2026. However, demand for neodymium is beginning to outstrip supply.
Permanent magnets
Roskill states that in the short term to 2021, neodymium-iron-boron (NdFeB) permanent magnet demand is forecast to grow strongly. The traditional consumer electronics and automotive sectors currently account for the majority of NdFeB demand, but growth is also expected from the emerging green technologies such as wind turbines and new energy vehicles (NEVs). Between 2016 and 2021, global NdFeB magnet production is forecast to grow by 4 – 5% per annum. Global NEV production is forecast to rise to around 3.5 – 4.0 million vehicles in the same period, while global wind power installations could increase by 0.4M MW according to Roskill’s report.
As a result of increasing consumption, neodymium (Nd) was expected have fallen into supply deficit in 2016, and this deficit is forecast to continue increasing to 2021. This would make continued growth of NdFeB magnets unsustainable, despite efforts by rare earth producers to increase neodymium supply. This is expected to result in price rises for Nd to a point where magnet consumers will begin to replace NdFeB magnet technologies with substitute materials. The green energy sector is the most vulnerable to NdFeB price rises because of the large size of magnets used in wind turbines. Technologies already in use in this industry include induction/synchronous generators in wind turbines as an alternative to permanent magnet motors, and induction motors in NEVs.
Roskill states that by 2021, it is expected that the high price of Nd and concerns over supply availability will make projected growth rates of NdFeB permanent magnets unsustainable, and demand for these magnets is forecast to fall rapidly from 2022, before stabilising at a much lower growth rate. Overall, NdFeB magnet growth between 2021 and 2026 is forecast to be flat, possibly falling by up to -1% per annum, but Nd prices will continue to rise. The price increase for most other rare earth metals will, however, be limited due to supply surpluses.
Demand for dysprosium will also grow from the use of magnets in high temperature applications (including NEVs) but manufacturers are actively trying to reduce dysprosium-containing magnet consumption wherever possible and to develop new ways to reduce intensity of dysprosium use.
Global supply
China still dominates global rare earth supply, accounting for an estimated 88% in 2016. Chinese exports of rare earth compounds, metals and alloys was expected to rise by 17,100t in 2016 but it is unlikely to see a significant increase in Chinese exports in future years as the vast majority of consumption takes place in that country. The Chinese government continues to encourage downstream processing and the export of manufactured goods over raw materials.
China’s position weakened slightly early in this decade as ROW production increased with the start of mining by Lynas in Australia and by Molycorp in the USA. Molycorp has since declared bankruptcy and closed its operations in 2015 with Chinese supplies filling the void left by Molycorp’s closure.
