Supply

Rare earth supply is dominated by Chinese producers accounting for 80% of global supply in 2018. Total dependence on Chinese domestic supply has been reducing since 2015 with increased external supply from Malaysia, USA, Russia, Vietnam and India.

Official Chinese rare earth production in 2018 was 115,000 tonnes of TREO, equating to 20,700 tonnes of NdPr oxide with the total global supply at 37,000 tonnes of NdPr oxide from rest-of-world and illegal supply sources. To meet projected demand for NdPr oxide in 2030, global supply needs to expand by 26,500 tonnes, equivalent to another 115,000 tonnes of TREO. At the same time, the proportion of illegal and undocumented Chinese supply is forecast to reduce from 27% to 14% over the next decade through continued government control.

Continued implementation and enforcement of Chinese Government policy will restrict future domestic supply. When coupled with projected strong demand for NdPr oxide, China will, ‘under clear policy’, seek additional supply outside the mainland. To meet projected demand over the next decade, additional supply is expected to be developed in Australia, North America and Africa, and China’s grip on global supply is expected to reduce to around 60% by 2030.

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Demand

Rare earths remain critical in various applications with future demand expected to remain strong driven by the clean energy economy. Global consumption of rare earths reached 137,000 tonnes of TREO in 2018 and is forecast to increase to 196,000 tonnes by 2030. China will continue to dominate global markets, strengthen its supply chain and increase the use of rare earths in clean energy and e-mobility with expected strong growth for NdPr oxide in Neodymium Iron Boron (NdFeB) magnets.

Rare earths in NdFeB magnets represent the single largest application, accounting for 26% of consumption. The use of NdFeB magnets in the automotive and factory automation sectors are the biggest growth applications for Nd demand. The growth in NdFeB magnets since 2005 is attributed to increased use in the automotive industry, in particular electric traction drive trains and electric power steering, and the forecast worldwide expansion of new energy vehicles (NEV), from almost 2 million units sold in 2018 to a predicted 110 million in 2030, will be the key growth driver for NdPr oxide used in magnets.

In 2016, the annual output of NdFeB magnets was 134,949 tonnes (according to the Association of China Rare Earth Industry) and over the past decade grew at 8-10% per annum. Magnets are forecast to grow by 7% per annum in the foreseeable future with demand reaching 184,975 tonnes in 2025. Magnet use in NEV drivetrains is forecast to account for 62% of the share of total demand by 2030.

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