Demand growth of the 2020s will soon be dwarfed by the astronomical demand growth of the 2030s, according to a new forecast by Adamas Intelligence. Therein lies the real defining challenge and opportunity facing the global rare earth industry today, the company said.
After growing at a CAGR of 6.4% from 2015 through 2019, global consumption of NdFeB alloys and powders will drop by 9.3% in 2020 on account of the ongoing negative effects of COVID-19 on demand for everything from EV traction motors to micromotors and sensors, wind power generators, consumer appliances, cordless powertools and dozens of other end-uses and applications, according to the Adamas forecast.
However, with the ongoing re-opening of key demand markets through the end of 2020 and into 2021, Adamas expects demand for most end-uses and applications to rebound strongly in 2021 and 2022 and thereafter rise steadily through the end of the decade and beyond.
Looking ahead to 2030, Adamas says that it is “exceptionally challenging” to foresee how, under any realistic scenario, the supply-side of the rare earth industry will be able to keep up with rapidly growing demand for magnet rare earths (i.e. neodymium, praseodymium, dysprosium and terbium).
It’s equally challenging to foresee how the industry will be able to cope with mounting surpluses of other sacrificially overproduced rare earths, such as cerium and lanthanum.
Adamas projects that the rapid demand growth of the 2020s will soon be dwarfed by the astronomical demand growth of the 2030s.
If the global industry continues to operate myopically—preparing, anticipating and investing only for a three to five-year outlook—the rate of demand growth for magnet rare earths will soon reach “escape velocity”; a point at which annual demand growth becomes so great (i.e. >6,000 tonnes per annum) that it is simply implausible for the already-lagging supply-side to catch up and keep up.
To avoid this fate and seize the enormous opportunity ahead, a flood of investment is imminently needed to develop new sources of supply and downstream value chains to convert that supply into metals, alloys, magnets and other materials used by high-tech industries globally.—Adamas Intelligence
Among the findings of Adamas analysis in the “Rare Earth Magnet Market Outlook to 2030”:
Market for Magnet Rare Earth Oxides to Increase Five-Fold by 2030: With total magnet rare earth oxide demand forecasted to increase at a CAGR of 9.7% and prices projected to increase at CAGRs of 5.6% to 9.9% over the same period, Adamas Intelligence forecasts that the value of global magnet rare earth oxide consumption will rise five-fold by 2030, from US $2.98 billion this year to US $15.65 billion at the end of the decade.
Annual NdFeB Shortages of 48,000 Tonnes Expected by 2030: Constrained by an expected under-supply of neodymium, praseodymium and dysprosium oxide from 2022 onward, Adamas Intelligence forecasts that global shortages of NdFeB alloy and powder will amount to 48,000 tonnes annually by 2030—roughly the amount needed for some 25 to 30 million electric vehicle traction motors.
Annual NdPr Oxide Shortages of 16,000 Tonnes Expected by 2030: Constrained by a lack of new primary and secondary supply sources from 2022 onward, Adamas Intelligence forecasts that global shortages of neodymium, praseodymium and didymium 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).
Annual Dy Oxide Shortages of 1,850 Tonnes Expected by 2030: Similarly, constrained by a lack of new primary and secondary supply sources from 2022 onward, Adamas Intelligence forecasts that global shortages of dysprosium oxide (or oxide equivalent) will rise to 1,850 tonnes in 2030, an amount roughly equal to current global annual mine production.