Rare earths sales likely to triple by 2015 - study

World demand for rare earths is forecast to expand by 7.1%/year to 180,000 metric tons by 2015, according to a new study from US industry market research firm The Freedonia Group.

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, according to the study.

Market growth is expected to accelerate substantially from the 2005-2010 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 NdFeB permanent magnets, the study says.

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, according to the study.

Neodymium-iron-boron (NdFeB) magnets, also known as “neo-magnets,” will account for the majority of sales.

Meanwhile, world demand for rare earths used in metal processing applications will climb 7.8%/year 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.

From a regional standpoint, 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, the firm said.

For more details on the World Rare Earths study, visit the Freedonia Group’s website.

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