Rare Earth Elements Market Size, Share & COVID-19 Impact Analysis, By Type (Lanthanum, Cerium, Neodymium, Praseodymium, Samarium, Europium, Others), By Application (Magnets, Metallurgy, Batteries, Polishing Agent, Glass and Ceramics, Catalyst, Phosphors, and Others) and Regional Forecast, 2021-2028

The global rare earth elements market size was USD 2,607.4 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 6.4% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 2,831.0 million in 2021 to USD 5,520.2 million in 2028 at a CAGR of 10.0% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The rising demand for consumer durables such as tablets, laptops, and smartphones is one of the factors driving the consumption of rare earth elements. The demand for these elements in developing economies is estimated to expand rapidly owing to an increase in industrialization, building & construction activities, and various digitization activities by governments in the respective countries. The boost in the demand for electric vehicles (EVs) in Germany, United States, and the U.K. is estimated to surge the consumption of rare earth minerals. Stringent rules on carbon discharges, and increasing concerns about the environment, have augmented the development of non-conventional energy sources, which will further increase the usage of these elements. However, the high cost of these minerals and the monopoly of China-based manufacturers is expected to hinder the market growth.

Shutdown of Mining Facilities during COVID-19 Pandemic to Disrupt the Market

Industries including automotive, and electronics were significantly impacted by the COVID-19 pandemic. The pandemic has inflicted damage on the production of rare earth and their supply as the mining activities were put on hold to mitigate the spread of the virus. Companies operating in the metal industry were unable to obtain rare earth minerals to produce alloys. The decline in the production rates of permanent magnets affected the manufacturing of vehicles and consumer electronic products. However, the demand for magnets from ventilator manufacturers decelerated the implications of COVID-19 on the market. Furthermore, the rising sales of electric and hybrid vehicles will support the deceleration of these effects on the market. According to the International Energy Association (IEA), the global electric car sales in 2020 were estimated to be 3.1 units million compared to 2.2 units million in 2019.

LATEST TRENDS

Rising Demand for Lithium-ion Batteries to Have Positive Influence on the Rare Earth Elements Market Growth

The increasing concerns regarding the environment have led consumers to opt for electric vehicles (EVs) due to their net-zero emissions. EVs incorporate lithium-ion batteries as a fuel source due to their low self-discharge rate and high energy density. As stated by IEA, the preference for EVs is expanding rapidly in countries, such as China, the U.S., and Japan. The electric car stock was 4.79 million in 2019, globally. Additionally, lithium-ion batteries are applied in many electronic devices, such as laptops, mobile phones, hard discs, dentures, and bearings. The increasing production of consumer durables in developing economies will surge the demand for batteries, thereby boosting the market growth.

DRIVING FACTORS

Increasing Adoption of Different Rare Earth Elements to Fuel Market Growth

Different types of elements are witnessing a rise in their demand from several industries due to their physical and chemical properties being ideal for specific applications. Cerium is used as a polishing agent and its demand is rapidly rising due to the growth of the electronics industry. Cerium is extensively used to polish surfaces such as display panels, liquid crystal displays, glass magnetic memory disks, and glass display panels. Additionally, the rising demand for such elements such as lanthanum, samarium, europium, and others for applications in batteries, displays, lasers, and optical electronics, will further fuel the growth of the market.

RESTRAINING FACTORS

Fluctuating Prices of Rare Earth Elements to Hinder Growth

In North America and Western Europe, the prices of rare earth oxides are volatile due to their very low volume share amongst other minerals. Products such as batteries, automotive motors, aircraft alloys, and bearings are made from rare earth oxides. The rising demand for these products will lead to an increase in the prices of raw materials and disruptions in the supply chain. Furthermore, China has created a monopoly in the market which has increased the export prices, thereby hampering the market growth. In addition, to fulfill the future demand for rare earth oxides, China has limited the supply, further disrupting the supply chain of end-use industries in foreign countries.

SEGMENTATION

By Type Analysis

Neodymium Segment Dominated in 2020 Stoked by High Demand from Hybrid Vehicle Manufacturers

Based on the type, the market is segmented into lanthanum, cerium, neodymium, praseodymium, samarium, europium, and others. The neodymium segment held the dominant share in the market in 2020. The rising demand from electric and hybrid vehicle manufacturers is driving the segment’s growth. Neodymium-based permanent magnets are used in the production of batteries for electric vehicles. The growth of the cerium segment is associated with the increasing demand from the automotive industry. It is used in exhaust systems and catalytic converters to minimize emissions.

Praseodymium is used as an alloying agent with magnesium to produce high-strength alloys for aircraft engine applications. The growth of the praseodymium segment is linked to the surging demand from the aerospace industry. The lanthanum segment will exhibit a significant growth rate during the forecast period owing to the rising demand from battery manufacturers. Lanthanum is an intermetallic component of nickel-metal hydride batteries, which are used in consumer electronic devices. The growth of the samarium segment is due to the increasing demand from hybrid vehicle manufacturers for permanent magnet applications.

By Application Analysis

Magnets Segment Held the Largest Share in 2020 Fueled by High Demand from Manufacturers

Based on the application, the market is segmented as magnets, metallurgy, batteries, polishing, glass and ceramics, catalyst, phosphors, and others. The magnets segment held the highest share in the market in 2020. The growth of this segment is associated with the high demand from manufactures of servo motors, handheld consumer electronics, hard drives, sensors, speakers, and headphones. The battery segment is projected to grow at the fastest CAGR during the review period. Factors such as increasing demand from electric vehicle producers, combined with technological developments in energy storage applications, will boost the segment’s growth. Consumers prefer hybrid or electric vehicles due to the minimum amount of carbon emissions. The U.S., China, and European countries are the leading countries fueling the demand for electric vehicles, resulting in the growth of this segment.

The catalyst segment will exhibit substantial growth during the forecast period. The rising demand for catalytic converters from the automotive industry will drive the growth of the segment. The growth of the metallurgy segment is associated with the fueling demand for alloyed metals from industries including automotive and aerospace and defense. The increasing production of ceramic tiles due to the rising number of building & construction activities globally will boost the growth of the glass and ceramics segment. The surging production of consumer electronics will propel the growth of the polishing agent segment. Rare earth elements are used for the polishing of liquid crystal displays, camera lenses, and other optical products.

REGIONAL INSIGHTS

The market size in Asia Pacific stood at USD 2,220.8 million in 2020. The region occupied the dominant position in the market in 2020 and is projected to preserve its foremost position throughout the forecast period. The dominance is accredited to the presence of major consumer electronics manufacturers in the region. China is significantly contributing to the growth of the regional market as it is considered to be the manufacturing hub for several products required in the automotive and consumer electronics industries. Additionally, the increasing number of building & construction and industrialization activities in China and India will support the market growth.

A surge in the production of electric vehicles in the U.S. will drive the demand for rare earth minerals in North America. Additionally, the presence of major electric and hybrid vehicle manufacturers in the region, such as Tesla Inc., WM Motors, and Lucid Motors will fuel the market growth.

Countries such as the U.K, Germany, and France are the leading contributors to the growth of the market in Europe. The automotive industry is the major end-user of rare earth minerals in the region for applications such as magnets, metallurgy, catalysts, and glass. Additionally, the increasing focus on green technology in Europe will boost the demand for rare earth minerals.

The growth of the market in South America is characterized by the increasing industrialization and building and construction activities in the region. In the Middle East & Africa, the high demand for rare earth metals is from oil and gas refineries. Additionally, steps taken by governments to set up wind turbines owing to the high wind speeds in the region and to increase reliability on non-conventional energy sources will fuel the market growth.

KEY INDUSTRY PLAYERS

Agreements with Automotive Manufacturers Will Augment the Presence of Key Players

The competition landscape of the rare earth elements market is fragmented. Key players are incorporating approaches such as acquisitions and joint ventures to aid their presence in the market. Partnerships of small-scale rare earth mineral producers with automotive OEMs will provide them with lucrative growth opportunities. Furthermore, leading players are targeting to boost their production capabilities to increase their market presence. Technological advancements and the acquisition of mining sites are the factors associated with the dominance of these market players.

LIST OF KEY COMPANIES PROFILED:

• Baotou Rare Earth (China)


• China Minmetal Rare Earth (China)


• Avalon Advanced Materials (Canada)


• IREL (India)


• Metall Rare Earth Limited (China)


• Arafura Resources (Australia)


• Canada Rare Earth Corporation (Canada)


• Lynas Corporation (Australia)


• Northern Minerals (Australia)


• Greenland Minerals Limited (Australia)


• Other Players

REPORT COVERAGE

The global rare earth elements market research report provides a detailed analysis of the market and focuses on key aspects, such as profiles of leading companies, rare earth elements types, and leading applications of the product. Besides this, it offers insights into the current market trends, dynamics, and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

Report Scope & Segmentation