The global rare earth metals market is highly concentrated and marked by the presence of a large number of manufacturers. The top six players accounted for 68.5% of the total market in 2012. Molycorp, Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co., Lynas Corporation Limited, Great Western Mineral Group, China Rare Earth Holdings, and Indian Rare Earths Limited are the leading manufacturers in the global rare earth metals market. In order to expand their revenue base in other geographies and product segments, companies are opting for mergers and acquisitions and joint ventures to develop a strong distribution network around the world. Players are also striving to develop cost effective technology, Transparency Market Research (TMR) finds in a new study.
The growing demand for these metals and their premium price are luring new players in the market.The threat of substitutes will be medium in the coming years. The export restrictions from China has created a demand supply gap, which has led consumers to look for other alternatives. Some companies have started focusing on R&D in order to develop new substitutes. A case in point would be General Electric. The company has invested on R&D for engineering nanocomposites to reduce dependency on neodymium for the production of magnets. Thus, the threat of substitutes is expected to rise from low to medium in the coming years.
Growth in Permanent Magnet Industry to Boost Demand for Rare Earth Metals
The growth in the permanent magnet industry is expected to drive the demand for rare earth metals. The developing application markets in China and Japan such as consumer electronic, standard automotive, electric bicycle, and air conditioning have triggered the growth of the permanent magnet industry. This in turn has fueled the demand for rare earth metals. Rare earth metal catalysts are used in automobiles, glass, phosphors, and metallurgical industries, thus boosting the market.
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Rapid developments in end user industries in China have triggered the demand for rare earth metals. The growth of the market is also due to the swift economic growth in China. The phosphors application market is responsible for the high demand of rare earth metals such as terbium, europium and yttrium. Phosphors application areas which make use of these metals include florescent lamps, CRT displays, and LCD screens.
Environmental Concerns Restrict Export of Rare Earth Metals
The mining, refining, and recycling of rare earth metals have serious environmental consequences. Poisonous chemical and radioactive materials are released into the environment during the refining process. Such concerns such have caused the Chinese government to restrict the exportation of these metals.
Another challenge faced by the market is the depleting reserves of these metals. 97% of the rare earth metals are supplied by China. This is leading to an over exploitation of existing reserves as the demand for these metals rise from wind turbines and electric vehicles industry. Another factor hampering the growth of the market is the high capital investment required for the extraction of these metals.
Exploration of Untapped Reserves to Hold Opportunities of Growth
Although China supplies a major portion of rare earth metals, the reserves of these metals across other parts of the world remain unexplored. The unmined reserves will thus provide new growth opportunities in the market.
According to the report, the global market opportunity in rare earth metals is expected to rise from US$5,649.7 mn in 2015 to US$8,195.4 mn by 2018. By type, the cerium segment is expected to lead and account for 37.8% of the global market by 2018. On the basis of application, the magnets segment, followed by the metallurgy segment is expected to lead in the coming years. The magnets segment is anticipated to account for 22.9% of the global rare earth metals market. By geography, Asia Pacific not only held a major share in the past but is also expected to lead in the market in the future. Asia Pacific is expected to account for 81.3% of the total market.
