The global neodymium market size was valued at USD 2.07 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 15.0% from 2022 to 2030. The market is anticipated to be driven by the increasing usage of permanent magnets in the automotive industry. Neodymium-iron-boron (NdFeB) is of vital significance in electric motors, which are further used in electric vehicles (EVs) and wind energy-related applications. The growing focus on alternative energy has augmented the demand for wind energy and EVs, which, in turn, is boosting the market growth.
The U.S. is a vital market for rare earth. The need for NdFeB magnets is expected to rapidly grow on account of rising demand from high-end applications including robotics, wearable devices, EVs, and wind power. The increasing demand for magnets in various end-use industries has pushed key manufacturers to set up new plants.
For instance, in April 2022, MP MATERIALS announced that it is going to invest USD 700 million to set up a new production facility for rare earth metals, magnets, and alloys in Fort Worth, Texas, U.S. by 2025. This facility is likely to have a production capacity of 1,000 tons per year of NdFeB magnets. These magnets will be supplied to General Motors to produce 500,000 EV traction motors.
End-use Insights
The automotive segment held the largest revenue share of over 30.0% in 2021. Automotive is a vital end-use industry for the market owing to the extensive use of NdFeB magnets in the automobile sector. They are used as the static part of electric motors, which are gaining high demand owing to technological advancements.
For instance, electric motors are used in windows, windscreen wipers, and door-closing systems of vehicles. The performance of these magnets is better in the case of smaller and lighter motors. As the auto industry is inclining toward reducing weight, the application of neo-based magnets is expected to rise further.
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Application Insights
Magnets held the largest revenue share of over 55.0% in 2021. NdFeB is a very strong permanent magnet, which finds application in producing small-size electronics such as loudspeakers, smartphones, and computer hard drives. Also, they are extensively preferred in EVs on account of being less costly and lightweight compared to samarium cobalt (SmCo) magnets.
Regional Insights
Asia Pacific held the largest revenue share of over 90.0% in 2021. China and Japan are significant markets in the Asia Pacific, with both countries being among the largest producers of permanent magnets in the world. However, developing economies such as India and Southeast countries such as Indonesia and Thailand has huge potential.
This growth potential of Asia Pacific is attributed to the high economic growth, rising disposable income, and subsequent increase in the production of passenger vehicles, electronics, and wind power generators in developing countries such as China, India, and Japan. Moreover, the shift of manufacturing plants from other locations to Asian countries, rising investments in the EV industry, and growth in the production of electric motors are propelling the growth of the market in the region.
North America is projected to register a growth rate of 13.0%, in terms of revenue, from 2022 to 2030. The growth of the oil & gas industry in the region is anticipated to propel the demand for catalysts over the forecast period. For instance, in June 2022, the U.S. President asked the oil refiners in the country to produce more diesel and gasoline. Refineries convert oil into refined products including gasoline, diesel, and jet fuel. By the end of June 2022, the utilization rate for U.S. refineries reached around 94%.
The rising investments in the onshore industry are compelling wind turbine manufacturers to innovate and introduce new products. For instance, in May 2022, GE launched the 3MW Sierra onshore wind turbine platform, exclusively for North America. The turbines will be manufactured in the Pensacola, Florida facility and most of its components will be produced in North America itself. Such developments in the wind turbine industry are anticipated to augment market growth during the forecast period.
Some prominent players in the global neodymium market include:
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