Highlights
- The rare earth magnet market is projected to grow from $18.51 billion in 2022 to $35.97 billion by 2031.
- Key applications include:
- Electronics
- Automotive
- Renewable energy sectors
- Market challenges:
- Supply chain vulnerabilities
- Geopolitical risks
- Dependence on limited global rare earth element supplies
- China holds a quasi-monopolistic position
- Emerging technologies aiming to address industry constraints:
- Recycling
- Alternative magnet designs
- 3D printing
- AI-driven material discovery
- Support for sustainable growth
The rare earth magnet market, valued at USD 18.51 billion in 2022, is projected to reach USD 35.97 billion by 2031, with a compound annual growth rate (CAGR) of 7.7% between 2023 and 2031. Rare earth magnets, primarily composed of neodymium, iron, and boron, are known for their exceptional strength, compact size, and extensive applications across industries such as electronics, automotive, aerospace, and renewable energy. Despite their efficiency, these magnets face challenges like sensitivity to high temperatures, corrosion, and dependence on limited global rare earth element supplies.
Rare Earth Exchanges reviewed multiple sources, including InsightAce Analytic Pvt. (opens in a new tab)Ltd (opens in a new tab), a Pune, India-based consultancy, as well as Precision Business Insights. Also see Rare Earth Exchanges’ “Rare Earth Magnets-A Dynamic, Unfolding Market, But at What Velocity of Change?”
Market Drivers and Opportunities
The growing demand for consumer electronics, electric vehicles (EVs), and renewable energy solutions is fueling the rare earth magnet market. Increased global internet penetration and technological advancements in electronics, including smartphones, laptops, and TVs, are bolstering market growth. Additionally, the transition to renewable energy sources, such as wind turbines, and rising industrial automation are key contributors. In aerospace and defense, rare earth magnets play a vital role in military and aviation systems, further driving demand.
Challenges and Constraints
Despite its promising growth, the market faces hurdles, including supply chain vulnerabilities due to the uneven global distribution of rare earth elements. In fact, China has a quasi-monopolistic position on some magnet production. Environmental and geopolitical issues related to rare earth mining also pose risks. Furthermore, the market experienced setbacks during the COVID-19 pandemic, as lockdowns halted production, temporarily slowing growth.
Market Segmentation and Regional Insights
Rare earth magnets are categorized into neodymium-iron-boron (NdFeB) and samarium cobalt (SmCo) types. NdFeB magnets dominate the market due to their superior magnetic properties and widespread use in compact machinery. By application, the consumer electronics segment is poised for rapid growth, driven by rising demand in key regions like the U.S., Germany, China, and India.
Regionally, North America leads the market, fueled by increasing EV adoption and renewable energy investments. The Asia-Pacific region is expected to grow rapidly due to urbanization, industrialization, and the rising production of wind power and electric vehicles.
Competitive Landscape
Major players in the market include Hitachi Metals Group (Proterial) Shin-Etsu, TDK, MP Materials Inc., and Lynas Corporation. Notable developments include Hitachi Metals’ initiative to develop ferrite-based magnets to reduce dependence on rare earth elements and USA Rare Earth’s acquisition of advanced magnet manufacturing technology.
Outlook
The rare earth magnet market is set for robust growth as industries adopt innovative technologies and prioritize sustainability. Advances in recycling and alternative materials may address supply challenges, while global investments in renewable energy and automation further expand the market’s horizon. With its critical role in emerging technologies, the rare earth magnet industry remains integral to the global industrial landscape.
Advancements Forthcoming?
Several disruptive technologies have emerged in the rare earth magnet industry. These technologies aim to address supply chain constraints, reduce environmental impact, and meet rising demand from sectors like electric vehicles and renewable energy. Below are a handful of developments.
Rare earth recycling represents a promising future. As Rare Earth Exchanges recently reported, recycling rare earth magnets from electronic waste (e-waste) is gaining traction as a sustainable way to recover valuable materials. Companies and research labs are developing efficient methods to extract and recycle rare earth elements from used electronics, such as hard drives and electric motors.
What are some benefits of this approach? Recycling reduces dependence on mining, minimizes environmental impact, and stabilizes supply chains, and this could be very useful in reconfiguring dependency on China over time.
An example includes the U.S.-based Urban Mining Co(opens in a new tab) (opens in a new tab)., which uses a process to recover and remanufacture neodymium magnets from e-waste, while Japan’s Hitachi has pioneered robot-based disassembly systems to automate magnet recovery.
It should be noted that recycling solutions will likely take many years if ever, to emerge as viable competitive options at scale.
What about magnet design optimization and less rare earth content?
Many companies and research groups are working on magnet designs that maintain high performance while reducing reliance on critical rare earth elements like dysprosium and terbium. These optimized designs use a lower concentration of rare earth elements or substitute them with other materials while preserving magnetic properties.
With this approach, companies strive to reduce dependence on scarce and expensive materials, lower costs, and mitigate supply risks.
Examples include Shin-Etsu Chemical(opens in a new tab) (opens in a new tab) and Hitachi Metals (Proterial(opens in a new tab) (opens in a new tab)), which have developed technologies for producing high-performance magnets with reduced dysprosium content. Toyota has also invested in magnet designs that reduce rare earth usage.
Other approaches center on developing rare earth-free magnets. Researchers are exploring alternative materials, such as iron nitride (Fe16N2), manganese-bismuth (MnBi), and cobalt-iron alloys, that may serve as effective substitutes for rare earth magnets, especially in applications that do not require the extreme strength of neodymium magnets.
This approach could significantly reduce the reliance on rare earth mining and help diversify material sources.
Companies like Infineon(opens in a new tab) (opens in a new tab) and VACUUMSCHMELZE(opens in a new tab) (opens in a new tab) are exploring rare earth-free solutions for specific applications. However, fully rare earth-free magnets with comparable strength are still in the research phase and may take time to become widely commercialized.
The development of 3D Printing and additive manufacturing of magnets has raised interest. Additive manufacturing, or 3D printing, allows for the production of magnets with complex geometries that are difficult to achieve through traditional manufacturing. Researchers are experimenting with sintering rare earth powders directly, creating custom shapes that enhance performance and efficiency.
This approach could reduce waste, enable custom designs, and potentially allow on-demand manufacturing. Urban Mining Co. has again developed a patented method for 3D printing NdFeB magnets using recycled materials. The University of Delaware is also a center of research in this field.
Other approaches to consider include high-temperature resistant magnets (AT&M in China and Arnold Magnetic Technologies in the U.S.) are working on SmCo magnets and coated NdFeB magnets that provide higher temperature resistance), artificial intelligence (AI) for magnet development and material discovery and The Materials Project at Lawrence Berkeley National Laboratory as well as improve sintering and manufacturing techniques with examples from Ningbo Yunsheng in China and Hitachi Metals, both advancing their sintering processes to improve the quality and durability of their products.
These disruptive technologies aim to diversify material sources, reduce environmental impacts, and meet the increasing demand for rare earth magnets across emerging industries. The combination of recycling, alternative materials, 3D printing, AI-driven material discovery, and improved manufacturing techniques shows promising potential to reshape the rare earth magnet industry in the coming years.
Daniel
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