Magnet rare earth oxide market to increase fivefold by 2030 – report

A new report by Adamas Intelligence forecasts that the market for magnet rare earth oxides will increase fivefold by 2030 to US$15.65 billion from the current US$2.98 billion.

Underpinning this growth is total magnet rare earth oxide demand, which is forecast to increase at a compound annual growth rate of 9.7%, and prices, which are projected to increase at CAGRs of 5.6% to 9.9% over the same period.

Shortages in raw materials are also expected to play a role in the rare earth oxide market, the report says. 

“Constrained by a lack of new primary and secondary supply sources from 2022 onward, Adamas Intelligence forecasts that global shortages of neodymium (Nd), praseodymium (Pr) and didymium (Dy) oxide (or oxide equivalent) will collectively rise to 16,000 tonnes in 2030, an amount equal to roughly three-times Lynas Corporation’s annual output, or three-times MP Materials’ annual output, of neodymium and praseodymium oxide (or oxide equivalents),” the report says.

The market researcher also sees the undersupply of Nd, Pr and Dy oxide generating global shortages of NdFeB alloy and powder, which will amount to 48,000 tonnes annually by 2030 – roughly the amount needed for about 25 to 30 million electric vehicle traction motors.

Electric traction motors, commercial EV traction motors and electric bicycles, motorcycles, and scooters are expected to be jointly responsible for 23% of total global demand for NdFeB alloys and powders by the end of the decade.

“Considering additional uses of NdFeB magnets in EVs, including micromotors, sensors and speakers, we conservatively forecast that EVs will consume one out of every four tonnes of NdFeB alloy and powder produced globally in 2030,” the document states.

In its report, Adamas explains that its forecast is based on the evaluation of several developments, including the fact that in the second half of 2020, production of NdFeB alloy and powder surged to record-high levels, fueling a drawdown of magnet rare earth oxide and metal inventories in China, which propelled prices of neodymium, didymium, dysprosium and terbium to multi-year highs.

In addition to this, a coup in Myanmar,  the main supplier of heavy rare earth feedstocks to China, through the first quarter of 2021, has contributed to the levelling of magnet rare earth oxide, and pushed metal prices higher than anticipated.

“Moreover, with the U.S. recently rejoining the Paris Agreement on climate change and unveiling ambitious plans for electrifying the nation’s vehicle production and fleets, we see scope for a broad continuation of last year’s demand resurgence through 2021, and beyond, with the U.S. joining Europe and China as a major driver of the market’s growth,” the report states.