Rare Earth Elements Market Will Record a CAGR of 10.2% Between 2022-2026

The global rare earth elements market is set to experience significant growth, with a value of US$3.5 billion in 2020 projected to reach US$7.3 billion by the end of 2026, according to a recent market analysis. The market is expected to exhibit a compound annual growth rate (CAGR) of 10.2% between 2022 and 2026. Rare earth elements, also known as rare earth oxides (REO) or lanthanides, play a crucial role in various industries, including electric vehicles, clean energy technologies, and high-tech applications.

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The clean energy revolution is one of the major drivers propelling the rare earth elements industry. Clean energy technologies such as electric vehicles and wind power generation are expected to fuel the expansion of the market in the foreseeable future. The demand for neodymium-based magnets, particularly in electric vehicles, is predicted to rise significantly, with global electric vehicle sales estimated to reach 32 million units by 2030.

Furthermore, the growth of wind farms worldwide will continue to drive the demand for light and heavy rare earth elements, including neodymium, praseodymium, and dysprosium, essential components in wind turbine motors. Despite the challenges posed by the COVID-19 pandemic, the offshore wind industry had its second-best year ever in 2020. The cumulative offshore wind power capacity is projected to reach 228 GW by 2030, further increasing the demand for rare earth elements.

The rare earth elements market also benefits from growing applications in efficient lighting, particularly in phosphors for energy-efficient lights. Additionally, investments in recycling technologies and innovation present new opportunities for the market. The reclamation of rare earth elements from end-of-life electronics is a promising avenue, attracting investments from both new entrants and existing companies in the industry.

However, the market faces challenges, including scarcity of rare earth elements and the impact of China's trade policies. The current shortages in the market have prompted research into recovering rare earth from secondary resources such as rare-earth polishing powder waste. Moreover, the precarious trade policies of China, which lead both in production and demand for rare earth elements, exert a significant influence on the industry. Governments and downstream industries are exploring alternatives to establish a robust supply chain outside China.

Geographically, Asia Pacific remains the largest consumer of rare earth elements, accounting for over 80% of the global market. China, Japan, and South Korea have strong downstream integrated capacities, converting rare earth elements into value-added products. However, efforts are underway to break China's monopoly in the market. The Quad nations, including the United States, India, Australia, and Japan, are working to build a supply chain to reduce dependence on China.

Leading companies in the rare earth elements market include China Northern Rare Earth (Group) High-Tech Co. Ltd., China Minmetals Rare Earth Co. Ltd., Jiangxi Copper Corporation Limited, Shenghe Resources Holdings Co. Ltd., Xiamen Tungsten Co., Ltd., Guangdong Rare Earth Industry Group Co., Ltd., Grinm Advanced Materials Co., Ltd., China Rare Earth Holdings Limited, MP Materials, Lynas Rare Earths, Ltd., and IREL Limited.

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