Rare Earth Elements Market to Rapidly Grow Over 10% by 2026

April 2022

The rare earth elements market is expected to exhibit a robust growth rate during the forecasted period due to their exceptional performance and increased recognition worldwide. The market is witnessing lucrative opportunities propelled by the escalating usage of rare earth elements in aerospace and permanent magnet applications. Additionally, the demand for rare earth elements is surging owing to the increasing concerns about environmental pollution and the shift towards green technology. These elements effectively address issues related to pollutants in engine exhaust systems, leading to a rise in their demand. Furthermore, emerging economies and the growing dependence on sustainable resources are driving the growth of the rare earth elements market. Overall, the rare earth elements market is thriving and poised for significant expansion.

Fairfield Market Research predicts that the worldwide rare earth elements market has demonstrated two-fold growth potential, with a projected CAGR of 10.2% between 2022 and 2026. In contrast to US$3.5 Bn worth in 2020, the market is projected to reach US$7.3 Bn by the end of 2026.

Major Trends in Global Rare Earth Elements Market

  • The rare earth elements market is anticipated to reach an approximate US$7.3 Bn in revenue in 2026.

  • With 80% of the global market share, Asia Pacific becomes the largest consumer of rare earth elements market.

  • Magnets are likely to garner around 80% share in the rare earth elements industry by 2026

Extensive Industrial Applications Unlock Potential Avenues for Market Expansion

A positive trend in the global rare earth elements market has been witnessed, driven by the sophisticated demand for magnets across various industries. Rare earth elements find their applications in several sectors ranging from defence applications and functional ceramics to glass and magnets. Considering the widespread usage in diverse industries, such as electronics, power generation, medical, and automotive, magnets account for a significant portion of rare earth elements consumption.

An upsurge in demand for electric vehicles, consumer electronics, and wind turbine technologies have added sharp spikes to demand for magnets. To this end, 30% of overall rare earth elements volume is attributed to the magnets segment. The demand for magnets is further augmented by the increased application in diverse medical equipment, including MRI machines, insulin pumps, and sleep apnea machines. Such an expansive application base and accelerated demand is driving the rare earth elements market towards sound maturity.

Demand and Production Surplus in China Paves Way for Asia Pacific

The worldwide production of rare earth elements in 2020 was 243 KT, with China leading the market. China's refined supply (through separation and processing) of rare earth elements accounted for more than 85% of the global market in 2020, affirming its stronghold in the industry. Nevertheless, over the past decade, China's share in the supply of REE ore and concentrates has declined significantly, reaching 58% in 2020. Being the largest consumer region, Asia Pacific is likely to sustain the rare earth elements market leadership, and it is projected to retain over 80% of the global market.

Key Market Players

Leading players in the worldwide rare earth elements market comprise Aluminum Corp of China, Iluka Resources Limited, Arafura Resources Limited, and Lynas Rare Earths Ltd, among others.