Rare Earth Elements Market to Reach US$7.3 Billion by 2026, Driven by Clean Energy Technologies and Wind Farms
The rare earth elements (REE) market, also known as rare earth oxides (REO) or lanthanides, witnessed substantial growth in 2020, valued at US$3.5 billion. It is now predicted to reach US$7.3 billion by the end of 2026, exhibiting a remarkable CAGR of 10.2% between 2022 and 2026. A recent market analysis highlights the growing significance of rare earth elements in clean energy technologies, wind farms, and various high-tech industries, propelling the industry’s expansion.
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Clean Energy Technologies Stealing the Limelight
Clean energy technologies, particularly electric vehicles (EVs) and wind power generation, are expected to be the primary drivers behind the rare earth elements market’s growth in the coming years. The increasing demand for neodymium-based magnets, ideal for EVs, is anticipated to surge as the global sales of electric vehicles are predicted to reach 32 million units by 2030, representing a tenfold increase from current sales figures.
Sustained Uptake by Wind Farms
The rare earth elements industry is set to benefit from the growing trend of vehicle electrification, specifically in NiMH batteries used in hybrid vehicles. Light rare earth elements such as lanthanum, cerium, praseodymium, and samarium are expected to be key beneficiaries of this trend. Additionally, rare earth elements play a crucial role in modern wind farms, with the global offshore wind industry witnessing substantial growth despite the challenges posed by the pandemic. The cumulative offshore wind power capacity is projected to reach 228 GW by 2030, with 40 GW/year of new installations expected between 2020 and 2030, according to the International Renewable Energy Agency (IRENA).
Growing Application in Efficient Lighting
The market for rare earth elements is expected to thrive with the growing application of magnets in phosphors, making them essential for energy-efficient lighting solutions. Innovation in recycling and investment in newer technologies provide promising opportunities for the market. The possibility of reclaiming rare earth elements from end-of-life electronics draws new investments, attracting both new entrants and existing companies in the rare earth elements industry.
Challenges: REE Scarcity and Constant Threat from China’s Trade Policy
Despite the growing demand for rare earth elements, the industry faces challenges related to scarcity and China’s trade policies. Recovery of rare earths from secondary resources, such as rare-earth polishing powder waste, has become a significant focus in global research due to current shortages. Moreover, China’s precarious trade policies hold massive influence on the industry, leading to supply chain disruptions, fluctuating tariffs, and soaring product prices. To address these challenges, governments across Western economies are exploring recycling rare earth elements as a key supply source in the future, aiming to establish a robust supply chain outside China.
China Leads Demand and Production
China remains the dominant player in the global rare earth elements market, accounting for over 85% of the refined supply (separation and processing) in 2020. However, its share in the supply of REE ore and concentrates has dropped to 58% in the same year, as other countries such as Australia, the U.S., and Myanmar have increased their share substantially. Asia Pacific continues to be the largest consumer of rare earth elements, holding over 80% of the global market.
New Processing Capacities and Collaborations Outside China
Companies outside China, such as Lynas Rare Earth Ltd. and MP Materials, have emerged as major producers of rare earth elements. The U.S. and Russia are also taking steps to reduce dependency on China by planning new projects and offering incentives. However, companies positioned in China still maintain an upper hand in the market due to state-backed funding and strong downstream integrated capacities.
The Rare Earth Elements Market is Segmented by Product Coverage Into
- Light Rare Earth Elements
- Misc. (Europium, etc.)
- Heavy Rare Earth Elements
- Misc. (Holmium, Thulium, etc.)
Applications of Rare Earth Elements Market include
- FCC Catalysts
- Automotive Catalysts
- Polishing Powders
- Misc. (Defence, Chemical, Glass, etc.)
Prominent companies contributing to the rare earth elements market include
- China Northern Rare Earth (Group) High-Tech Co. Ltd.
- China Minmetals Rare Earth Co. Ltd.
- Jiangxi Copper Corporation Limited
- Shenghe Resources Holdings Co. Ltd.
- Xiamen Tungsten Co., Ltd.
- Guangdong Rare Earth Industry Group Co., Ltd.
- Grinm Advanced Materials Co., Ltd.
- China Rare Earth Holdings Limited
- MP Materials
- Lynas Rare Earths, Ltd.
- IREL Limited
Browse Global Rare Earth Elements Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2022-2026 –(By Product Coverage, Application Coverage, By Geography, Leading Companies): https://www.fairfieldmarketresearch.com/report/global-rare-earth-elements-market
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