Over the recent past, the global production of rare earth elements (REE) has witnessed a consistent increase. These elements are vital for the production of electric vehicles (EV), defense products, clean energy, and high-tech consumer electronics. REEs are used in several application areas such as glass, magnets, catalysts, defense applications, and functional ceramics. Among these, magnets and catalysts hold the most significant market share owing to the rise in the production of EVs and advanced consumer electronics. In the coming years, the rapid shift to EVs and clean energy technologies are poised to open fruitful business opportunities in the global rare earth elements Moreover, rigorous innovation, RD, and strategic collaborations and partnerships are expected to further boost market growth.
Fairfield Market Research finds that the total market value of the rare earth elements market is predicted to reach US$ 7.3 billion by 2026, registering a CAGR of 10.2% between 2022 and 2026. Considering that the global rare earth elements market was valued at US$ 3.5 billion in 2020, the expected market value is a strong indicator of the lucrative opportunities floating across the market. This favorable scenario is set to create novel business outcomes, driving robust market expansion.
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Widespread Adoption of Clean Energy Technologies Set to Launch New Opportunities
In the near future, clean energy technologies, particularly electric vehicles and wind power generation, are poised to lead growth in the rare earth elements market. Based on Fairfield Market Research’s recent analysis, by 2026, magnets are projected to command a value share of over 80% in the rare earth elements market. These magnets are extensively used in various clean energy technologies. Neodymium based magnets, widely considered highly suitable for EVs, are set to garner demand over the assessment period. Further, demand for light earth elements such as samarium, cerium, lanthanum, and praseodymium is projected to augment as the production of NiMH batteries increases as these batteries are essential in the manufacturing of hybrid vehicles. Additionally, with the growth of modern wind farms, demand for REEs is expected to surge in the foreseeable future.
During the forecast period, the clean energy sector is also anticipated to draw profitable returns from innovative technological advancements and recycling initiatives undertaken by major players in the global rare earth elements market. Despite this, the market is expected to face challenges due to supply chain volatility, sourcing regulations, fluctuating tariffs, and rising product prices. Market leaders are poised to tackle these challenges via recycling of rare elements, thus significantly overcoming supply volatility and government regulations.
Asia Pacific Sustains its Dominance Across Rare Earth Elements Market
Countries in the Asia Pacific have steered the region’s rare earth elements to robust maturity, with China alone accounting for over 90% of the supply. Asia Pacific is expected to command more than 80% of the global rare earth elements market over the forecast period. The region has mature capacities to convert REE into valuable products – the major reason for its global dominance. The most prominent import destinations include Europe and North America. Further, India, Australia, Japan, and the U.S., are expected to reduce their dependence on China for sourcing REEs. Key market players include China Rare Earth Group Co. Ltd, MP Materials, Lynas Rare Earth Ltd., Mitsubishi Corporation RTM Japan Ltd., Medallion Resources Ltd., and American Rare Earths Limited among others.
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