The Rare Earth Metals Market is estimated to be valued at US$ 5,317.05 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 Overview:
Rare earth metals include a set of seventeen chemical elements in the periodic table. These metals exhibit unique magnetic and luminescent properties. Rare earth metals find applications in diverse industries such as electronics, automotive, military, healthcare etc. They play a vital role in manufacturing hard disk drives, consumer electronics, fiber optics and lasers, magnets, rechargeable batteries and colorant in lanthanide series.
Market key trends:
Rare earth metals are witnessing increasing demand from electronics, automotive and military industries due to their unique properties. Around 50% of rare earth metals are used in manufacturing smartphones, laptops, headphones and other consumer electronics. Their demand is driven by growing electronics industry. NdFeB magnets containing rare earth elements such as neodymium and dysprosium see extensive use in electric vehicles. Hybrid, plug-in hybrid and electric vehicles use rare earth metals for their electric motors and batteries. Rare earth metals find defense applications in missile guidance systems, targeting technologies and stealth capabilities. Countries are stockpiling rare earth reserves for military uses. Increasing electronics and automotive production along with rising defense budgets is fueling demand for rare earth metals globally. However, around 95% of rare earth metals are produced in China which can cause supply risks. Countries are diversifying supply by exploring new mining reserves to avoid dependence on any single supplier nation.
Porter’s Analysis
Threat of new entrants: The rare earth metals market requires huge capital investments and has economies of scale. New entrants find it difficult to achieve the production volume required to compete with existing players.
Bargaining power of buyers: Rare earth metals have limited substitutes and buyers have few alternatives. This gives suppliers high bargaining power over buyers in terms of pricing and supply.
Bargaining power of suppliers: China dominates the global rare earth metals supply and has imposed export quotas in the past, exercising its power over global prices and availability.
Threat of new substitutes: There are limited substitutes for rare earth metals, which are used extensively in various industries like electronics, automobiles etc.
Competitive rivalry: The rare earth metals market is consolidated with China being the dominant producer and supplier.
SWOT Analysis
Strength: China accounts for over 95% of global rare earth metals supply and has an advantage of low production costs. Rare earth metals have widespread applications across industries.
Weakness: High dependency on China for supply. Fluctuations in Chinese policies affects global rare earth metals market. Prices are highly volatile.
Opportunity: Growing demand for rare earth metals from electric vehicles and renewable energy sectors provide new growth avenues. Countries are focusing on developing alternative supply chains to reduce reliance on China.
Threats: Geopolitical tensions can disrupt rare earth metals supply. Environmental regulations increase production costs.
Key Takeaways
The Global Rare Earth Metals Market is expected to witness high growth, exhibiting CAGR of 6.2% over the forecast period, due to increasing demand for electric vehicles and renewable energy generation. Rare earth metals are crucial components in batteries, magnets and other applications in green technologies.
Regional analysis: Asia Pacific dominates the global rare earth metals market, accounting for over 80% of the overall revenue in 2023, led by China. Australia is also emerging as another major supplier with growing investments in rare earth metals mining projects.
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. China Northern Rare Earth and China Minmetals Rare Earth are the largest players by revenue.
