Rare Earth Special: “China will continue to lead conversation in rare earths”

Published: Wednesday, 24 October 2012

Metal Events and Roskill Information Services discuss key issues in the market ahead of industry conference

The international rare earths industry continues to go through a period of upheaval.

Just a few years ago, the dominant issue was potential new mine supply from outside China, but the focus has now shifted to demand for rare earths, and particularly how China will meet its ever-expanding appetite, notably for heavy rare earths.

As the 8th International Rare Earths Conference convenes in Hong Kong this month, there will be much for delegates to consider.

While global economic uncertainty prevails, metals markets are generally under pressure.

However, demand patterns for rare earths are not so clear, as some of the group’s metals have the potential to increase market share in applications such as wind energy and electric vehicles, while others are supplying more mature sectors.

Last year’s conference saw much debate about the rising importance of heavy rare earths with a focus on those producers which would be able to meet the forecast gap in demand.


Heavy rare earths remain a topic for
discussion at this year’s rare earths

In 2012, this again looks likely to be a key topic for discussion, particularly as potential users actively look to reduce their reliance on rare earths to avoid any of the potential supply glitches and price spikes seen in recent years.

Roskill Information Services, which is presenting at the conference in Hong Kong, suggests that it now makes little sense to treat the rare earths group as a single commodity. The idea of a “rare earths market” does not exist, and to make sense of the future supply-demand picture, it is necessary to look more closely at the applications each metal is used in.

The dominant metals, accounting for nearly 70% of global demand for rare earth oxides, remain cerium and lanthanum.

These two metals also dominate production: out of a forecast 110,000 tonnes of official world production this year (85-90% coming from China), cerium oxide will make up just under 45,000 tonnes, with lanthanum oxide accounting for a little under 30,000 tonnes.

“We are dealing with 15 elements that occur in nature in varying ratios which are rarely consistent with the requirements of the market,” Roskill said.

Focus on magnets, phosphors

A section of this year’s conference has been given over to looking at the magnet market, which remains the main driver for neodymium demand. Demand for NdFeB magnets is forecast to grow by around 9% during the next eight years, with accelerated growth after 2016.

Roskill expects the supply of neodymium to remain tight until 2014-15 when new material should come on stream. However, questions remain over whether this will be sufficient “to assure potential users of NdFeB magnets for wind turbines and electric vehicles that feedstock is sustainable”.

Concerns about high prices and availability could limit the extent to which NdFeB permanent magnet direct drives are adopted for wind turbines.

In the phosphor sector, heavy rare earths are not vulnerable to substitution in the medium term as research into alternatives has not been successful.

“Demand for rare earths in phosphors is forecast to grow at 6-8% to 2017. Much of this growth will be related to continuing demand for RE phosphors in fluorescent lamps,” Roskill said.

China developments

Developments in China will again remain a major topic at this conference. Demand will continue to grow at the expense of the rest of the world and is expected to exceed 70% of total consumption by 2019-2020.

“China is the largest market for rare earths and metals and demand is increasingly from higher-value applications, such as magnets and phosphors, rather than lower-value applications in metallurgy and agriculture,” Roskill said.

This means that the likely shortages of heavy rare earths and possibly neodymium will also occur in China. At this stage, it is difficult to know how this will affect Chinese government policies, but is certain to be the subject of much speculation.

“Could it lead to more restrictions in the supply of rare earths to the rest of the world?” Roskill asked.

With little significant supply of heavy rare earths from outside China before 2016-17, companies dependent on a secure supply of dysprosium, terbium and europium look set to rely even more on the developing dynamics of the rare earths industry in the south of China.

8th International Rare Earths Conference, Shangri-la Hotel Kowloon, Hong Kong, November 13-15 2012, organised by Roskill Information Services Ltd and Metal Events Ltd. For more information visit www.metalevents.com