A report by Adamas Intelligence suggests that over the next two decades, the supply side of the rare earth industry may not be able to keep up with rapidly growing demand for magnet rare earths such as neodymium, praseodymium, dysprosium and terbium. 

The report also predicts that, if the global industry continues its present trend of 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. more than 6,000 tons per year) that the supply will be unlikely to catch up.

The report provides an overview of the global NdFeB alloy, powder and magnet rare earth markets, including a historical breakdown of production, consumption, prices and inventory levels from 2015 through 2019. It addresses the anticipated near-term impact of the COVID-19 pandemic on world markets and forecasts global supply, demand and prices from 2020 through 2030.

After growing at a CAGR of 6.4% from 2015 through 2019, Adamas predicts that global consumption of NdFeB alloys and powders will drop by 9.3% in 2020 due to the ongoing negative effects of COVID-19 on demand for everything from EV traction motors to micromotors and sensors, wind power generators, consumer appliances and cordless power tools.

Among the key findings in the report:

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 forecasts that the value of global magnet rare earth oxide consumption will rise five-fold by 2030, from $2.98 billion this year to $15.65 billion at the end of the decade.

Annual NdFeB shortages of 48,000 tons expected by 2030: Constrained by an expected under-supply of neodymium, praseodymium and dysprosium oxide from 2022 onward, Adamas expects annual global shortages of NdFeB alloy and powder to amount to 48,000 tons by 2030—roughly the amount needed for 25 to 30 million EV traction motors.

Annual NdPr oxide shortages of 16,000 tons expected by 2030: Constrained by a lack of new primary and secondary supply sources from 2022 onward, Adamas predicts that global shortages of neodymium, praseodymium and didymium oxide (or oxide equivalent) will collectively rise to 16,000 tons 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).

Source: Adamas Intelligence