Global rare earth metals market is estimated to be valued at USD 5,648.83 Mn in 2024 and is expected to reach USD 8,629.29 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.2% from 2024 to 2031.
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The demand for rare earth metals is expected to grow steadily during the forecast period. Rare earth metals are crucial components in many modern technologies and their usage is growing across various application industries such as automotive, manufacturing, consumer electronics, and others. The electric vehicles market in particular is projected to boost demand for rare earth metals as these are used extensively in manufacturing of batteries and motors for EVs. Further, increasing manufacturing activity around the world and growing demand for electronics like smartphones is also expected to boost consumption of rare earth metals in coming years. However, volatile rare earth metal prices and lack of mining infrastructure may hindrance the market growth to some extent during the forecast years.
Rising demand for electronics and electric vehicles
Global rare earth metals market is expected to witness growth significantly in the near future due to rising demand for electronic products as well as electric vehicles across the globe. Rare earth metals such as neodymium, praseodymium, and dysprosium which are essential components in manufacturing magnets, find widespread application in consumer electronics ranging from smartphones, laptops, headphones to speakers. With growing digitalization and increasing dependency on electronic devices, the demand for consumer electronics has witnessed a robust growth trajectory over the past decade. The demand is expected to further accelerate with the rollout of next-generation technologies like 5G networks, artificial intelligence, and quantum computing. As electronics become more advanced with miniaturization of components and high-performance specifications, rare earth magnets play a vital role. This growing dependence on rare earths in electronics will be a key factor supporting the expansion of the rare earth metals market. Electric vehicles require rare earth permanent magnets in their traction motors for torque and power qualities needed for acceleration. With tightening emission regulations and push for sustainability, global EV sales have picked up pace in recent years.
Geopolitical stockpiling
Growing concern of supply security and geopolitical stockpiling among major consumer nations is expected to drive the market growth. China dominates the global rare earth supply chain accounting for over 80% of production. This heavy reliance on China makes supply vulnerable to any trade restrictions or supply disruptions, as was evident during the China-Japan trade war a few years ago. There are also environmental and resource nationalization risks arising from Chinese policies. These supply risks have prompted countries like the U.S., Japan, Europe to focus on diversifying supply and developing domestic production.
Rare Earth Metals Market Report Snapshots
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