The Freedonia Group has two reports out that will be of interest to Hydrocarbon Processsing readers. The first examines world demand for rare earths, which is expected to grow 7.1% per year to reach 180,000 metric tons by 2015 (Table 1). The second report addresses the globes thirst for lubricants, which is predicted to rise 2.6% a year until 2015, with demand in that year projected to be 41.7 million metric tons.
With demand for rare earths increasing at a 7.1% clip per year, this means that, in dollar terms, sales are expected to more than triple from $3.0 billion in 2010 to $9.2 billion in 2015. Consumption will be driven by increases in battery alloy, electronic product, motor vehicle and permanent magnet output. Market growth is expected to accelerate substantially from the 20052010 period, when demand in most nations was negatively impacted by substantial and unexpected reductions in Chinese exports (beginning in 2009) that led to a sharp rise in rare earths prices. Neodymium and dysprosium are expected to post the fastest growth rates of any rare earth types, spurred by increased sales of heat-resistant neodymium-iron-boron (NdFeB) permanent magnets. However, cerium will remain the most widely used rare earth, accounting for almost one-third of the 2015 tonnage total.
Permanent magnets are the largest rare earths market, in terms of both value and volume. Sales will be fueled by increases in consumer electronics, electric motor, and hybrid electric and other motor vehicle production. NdFeB magnets, also known as neo-magnets, will account for the majority of sales.
World demand for rare earths used in metal processing applications will climb 7.8% annually through 2015 to 19,350 metric tons. Sales will be stimulated by increased levels of global steel production, particularly high-strength steels and steels with elevated anti-oxidation properties.
China has held a virtual monopoly on rare earths production since the turn of the century. In 2010, Chinese mines produced 111,000 metric tons of rare earths, accounting for over 90% of world output. Among the major Chinese suppliers are Inner Mongolia Baotou Rare-Earth Hi-Tech, China Minmetals and Jiangxi Copper. However, the emergence of non-Chinese suppliers, including Molycorp, Lynas and Great Western Minerals, combined with increased research and development in rare earths refining technologies, will boost overall rare earths supplies and eventually reduce upward pricing pressures.
Getting back to The Freedonia Groups report on lubicrants, it sees lubricant demand being driven primarily by strong economic growth, as countries continue to recover from the impact of the global economic recession in 2009. The company predicts the fastest increases will continue to be in Asia, followed by the Africa/Middle East region and Central and South America (Table 2). In addition to strong economic growth, all three of these regions will benefit from above-average increases in motor vehicle sales. Healthy advances in Eastern Europe will reflect a rebound in the regions industrial output.
Motor vehicles are the largest market for lubricants, and growth will be led by strong gains in the developing Asian countries, particularly in China and India. However, the trend toward increased drain intervals, influenced in part by the growing availability of superior, high-performance synthetic lubricants, will result in declining demand in Western Europe and North America.
The fastest growth in lubricant demand through 2015 will be in manufacturing and other markets. The Asia-Pacific region, led by China, will continue to be the primary driver of growth in these markets due to companies worldwide pursuing the regions key advantages of relatively low labor costs and political stability. Central and South America and the Africa/Middle East region will also achieve favorable growth in manufacturing as significant countries in both regions continue their industrial development.
In terms of product types, engine oils will continue to account for the greatest share of lubricant demand going forward. This will primarily reflect the importance of transportation in an increasingly global economy, from both a consumer and a commercial perspective. Hydraulic fluids will post the fastest growth due to a combination of increased demand in manufacturing operations and strong global growth in natural resource extraction industries such as mining and oil and natural gas production. HP