Global drivers for rare earth demand  Suzanne Shaw & Judith Chegwidden      Roskill Information Services             Augus...
DisclaimerThe statements in this presentation represent the considered views of RoskillInformation Services Ltd. It includ...
Summary  Demand by element in 2012  A more detailed look at demand in:     Permanent magnets     Phosphors  Demand by...
Major markets for rare earths          in 2012                                        Roskill                       Approa...
Estimated demand for rare earths by element       in 2012                                                                 ...
The ‘rare earths market’        does not exist.We cannot treat rare earths as a      single commodity.                    ...
We are dealing with 15 elements that occur in nature       in varying ratios – rarely consistent with the       requiremen...
A market for “rare earths” – a misguidedconcept           Metallurgical                           Autocatalyst            ...
Applications for cerium and lanthanum will       account for nearly 70% of global demand for       REOs in 2012           ...
Many minor applications for neodymium but       magnets are the market driver          World: Main markets for neodymium, ...
While the high value phosphor market is the       main application for Y, Eu and Tb, the use of Y in       advanced cerami...
Permanent magnets                                Roskill               Approachable. Independent. Expert.
Demand for rare earths in permanent magnets         estimated at 25,500t in 2012                                          ...
Over the last decade demand for Nd more than doubled       – driven by increased use of NdFeB magnets in       electronic ...
Over the next 8 years demand for NdFeB magnets is       forecast to grow by around 9%py – accelerated growth       after 2...
China will maintain its position as the leading       supplier of NdFeB magnets                        World: NdFeB magnet...
Will future growth come from wind turbines?          Global growth in wind turbine capacity, 1996 to 2011 (MW)        300,...
Growth in wind energy dominated by China                    Top 10 new installed capacity,                  Top 10 cumulat...
Direct drive turbines containing NdFeBs      • Very little of the current installed capacity contains rare earths. Only ne...
Will future growth come from HEVs?     10,000                   World: Forecast production of EVs/HEVs by type,           ...
Factors affecting future consumption ofNd, Pr and Dy in magnets• Demand for REEs in magnets is forecast to grow at 6-8% to...
Phosphors                             Roskill            Approachable. Independent. Expert.
Demand for rare earths in phosphors and         pigments estimated at 8,750t in 2012                  Demand for rare eart...
Demand for REEs in phosphors grew steadily between 2000       and 2010 at 4-5%py - growth over the next five years is     ...
In 2002, CRT screens accounted for 30% of phosphor       demand – by 2011 it was just 1%                                  ...
Factors affecting future consumption ofY, Eu and Tb in phosphors• Demand for REEs in phosphors forecast to grow at 6-8% to...
Other applications                                  Roskill                 Approachable. Independent. Expert.
Demand for rare earths in metallurgical and          catalyst applications                   Demand for rare earths in    ...
Demand for rare earths in polishing and glass        applications                 Demand for rare earths                  ...
Regional demand                               Roskill              Approachable. Independent. Expert.
China will continue to dominate global demand     World: Total demand for rare earths in China and ROW, 2000 to 2017 (%)  ...
China is the largest market for rare earth oxides and metals –       and demand is increasingly from higher value applicat...
Outlook for demand                                 Roskill                Approachable. Independent. Expert.
Growth in demand for neodymium in magnet        applications will continue to be the main driver        in the LREE sector...
Manufacturers have recognised limitations on supply of Tb        and Dy – Tb was engineered out of magnet formulations and...
Meeting the demands of the market• In 2012 there is a discontinuity between the natural occurrence of REEs and the  ratio ...
Roskill Consulting Group              •   Market assessments              •   Feasibility studies              •   Industr...
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Global demand for rare earths

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Global drivers for rare earth demand by Suzanne Shaw & Judith Chegwidden
Roskill Information Services
August 2012

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Transcript of "Global demand for rare earths"

  1. 1. Global drivers for rare earth demand Suzanne Shaw & Judith Chegwidden Roskill Information Services August 2012 Roskill Approachable. Independent. Expert.
  2. 2. DisclaimerThe statements in this presentation represent the considered views of RoskillInformation Services Ltd. It includes certain statements that may be deemed“forward-looking statements”. All statements in this presentation, other thanstatements of historical facts, that address future market developments, governmentactions and events, are forward-looking statements. Although Roskill InformationServices Ltd. believes the outcomes expressed in such forward-looking statementsare based on reasonable assumptions, such statements are not guarantees of futureperformance and actual results or developments may differ materially from those inforward-looking statements. Factors that could cause actual results to differmaterially from those in forward-looking statements include changes in generaleconomic, market or business conditions.While Roskill Information Services Ltd. has made every reasonable effort to ensurethe veracity of the information presented it cannot expressly guarantee the accuracyand reliability of the estimates, forecasts and conclusions contained herein.Accordingly, the statements in the presentation should be used for general guidanceonly. Roskill Approachable. Independent. Expert.
  3. 3. Summary  Demand by element in 2012  A more detailed look at demand in:  Permanent magnets  Phosphors  Demand by region  Outlook for demand Roskill Approachable. Independent. Expert.
  4. 4. Major markets for rare earths in 2012 Roskill Approachable. Independent. Expert.
  5. 5. Estimated demand for rare earths by element in 2012 Ce Other HREEs Pr Other HREEs polishing, metallurgy, magnets, lasers, phosphors, 5% 3% catalysts, glass, phosphors, glass, metallurgy, other Y Pr ceramics, other 7% Ce Y 40% Pr La magnets, phosphors, metallurgy, catalysts, glass, ceramics, metallurgy, Nd phosphors, ceramics, Nd polishing, other polishing, other 18% La Y La Nd phosphors, ceramics, 26% magnets, ceramics, other metallurgy, glass, catalysts, phosphors, otherSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  6. 6. The ‘rare earths market’ does not exist.We cannot treat rare earths as a single commodity. Roskill Approachable. Independent. Expert.
  7. 7. We are dealing with 15 elements that occur in nature in varying ratios – rarely consistent with the requirements of the market 45 World: Estimated production by element in 2012 (kt REO) • World 40 ‘official’ production of 35 ~110,000t in 30 2012 25 • 85-90% in China 20 15 • World demand 10 ~120,000t in 5 2012 • 65-70% in 0 ChinaSource: Roskill estimates statistics International trade Roskill Approachable. Independent. Expert.
  8. 8. A market for “rare earths” – a misguidedconcept Metallurgical Autocatalyst Phosphors Treatment Polishing Ceramics Magnets Water Glass Glass FCC/ La La Ce La Ce Nd Y Y Ce Ce Ce (Nd) Sm Tb Nd (Y) (Nd) (Nd) (Gd) Eu Pr (Er) (Ho) (Ib)Source: Roskill Roskill Approachable. Independent. Expert.
  9. 9. Applications for cerium and lanthanum will account for nearly 70% of global demand for REOs in 2012 World: Main markets for cerium and lanthanum in 2012 (%) Ceramics Other 1% 10% Metallurgy Phosphors 30% 3% Glass 11% Polishing 19% Catalysts 26%Source: Roskill estimates statistics International trade Roskill Approachable. Independent. Expert.
  10. 10. Many minor applications for neodymium but magnets are the market driver World: Main markets for neodymium, praseodymium and dysprosium in 2012 (%) Glass Phosphors Polishing 1% 3% Ceramics Other 1% 5% 1% Catalysts 1% Metallurgy 2% Magnets 86%Source: Roskill estimates statistics International trade Roskill Approachable. Independent. Expert.
  11. 11. While the high value phosphor market is the main application for Y, Eu and Tb, the use of Y in advanced ceramics is often forgotten World: Main markets for yttrium, europium and terbium in 2012 (%) Other Magnets 1% 1% Ceramics 44% Phosphors 54%Source: Roskill estimates statistics International trade Roskill Approachable. Independent. Expert.
  12. 12. Permanent magnets Roskill Approachable. Independent. Expert.
  13. 13. Demand for rare earths in permanent magnets estimated at 25,500t in 2012 • 98% NdFeB, Demand for rare earths in permanent magnets, growth driven by 2000 to 2017 (Nd in 2000 = 100) 500 consumer electronics, 450 standard 400 automotive, air 350 conditioning, 300 electric bicycles 250 200 • 2% SmCo for 150 specialist, high 100 temperature 50 applications 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f 2017f • ~75% China Nd Pr Dy Gd Tb Sm • ~20% Japan and other AsiaSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  14. 14. Over the last decade demand for Nd more than doubled – driven by increased use of NdFeB magnets in electronic equipment rather than “green” applications World: Demand for rare earth elements in 40,000 magnet manufacture, 2000 and 2010 (tREO) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2000 2010 Tb Gd Sm Dy Pr NdSource: Roskill estimates statistics International trade Roskill Approachable. Independent. Expert.
  15. 15. Over the next 8 years demand for NdFeB magnets is forecast to grow by around 9%py – accelerated growth after 2016 World: Permanent magnet production and value by type, 2005 to 2020 1,400 12,000 1,200 10,000 Magnet production (kt) Magnet value (US$M) 1,000 8,000 800 6,000 600 4,000 400 200 2,000 0 0 NdFeB production Other permanent magnet production NdFeB value Other permanent magnet valueSource: Bernecki, Clagett & Trout, Permanent Magnets 2010-2020 International trade statistics Roskill Approachable. Independent. Expert.
  16. 16. China will maintain its position as the leading supplier of NdFeB magnets World: NdFeB magnet production by region, 2005 to 2020 (kt) 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f China Japan Europe Other regions (including USA)Source: Bernecki, Clagett & Trout, Permanent Magnets 2010-2020 International trade statistics Roskill Approachable. Independent. Expert.
  17. 17. Will future growth come from wind turbines? Global growth in wind turbine capacity, 1996 to 2011 (MW) 300,000 • Global growth in 250,000 wind turbine capacity of 27%py 200,000 2000 to 2011 150,000 • Global capacity 100,000 could reach 450GW by 2020, 50,000 led by growth in China 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Annual CumulativeSource: Global Wind Energy Council Roskill Approachable. Independent. Expert.
  18. 18. Growth in wind energy dominated by China Top 10 new installed capacity, Top 10 cumulative capacity, Jan-Dec 2011 (%) Dec 2011 (%) Others Others 13% Portugal 13% China Sweden Canada 2% France 2% 26% 2% 2% China Italy 44% UK Spain 2% 3% 3% Italy Canada 3% 3% UK France 3% 3% Germany India 5% 7% Spain USA India 9% 20% 7% USA Germany 16% 12%Source: Global Wind Energy Council Roskill Approachable. Independent. Expert.
  19. 19. Direct drive turbines containing NdFeBs • Very little of the current installed capacity contains rare earths. Only new design, large-size direct drive turbines rely on large quantities of NdFeB magnets • Direct drives are favoured for large offshore turbines. These turbines have a higher production cost but are more efficient and reliable • The European Joint Research Centre estimates that turbines containing permanent magnet motors will account for 15% of market share by 2020, increasing to a possible 20% by 2030 • Optimistic forecasts predict direct drives to grow by 50-60% 2012-2013, led by growth in China, followed by slower growth of 10-20% to 2015 once penetration stabilises • However, companies still offer traditional geared models for smaller turbines and could easily revert to this technology if Nd prices rise to unsustainable levels • What is the future for direct drives in China?Source: Bloomberg Roskill Approachable. Independent. Expert.
  20. 20. Will future growth come from HEVs? 10,000 World: Forecast production of EVs/HEVs by type, 2010 to 2025 (000 units) • Production of EVs/HEVs 9,000 could reach 3.2-9.2 8,000 million by 2020 7,000 • In particular, HEV motor 6,000 systems often rely on 5,000 NdFeB magnets 4,000 • Toyota and others are 3,000 looking at induction 2,000 motor as an alternative, if 1,000 the price of Nd becomes unsustainable 0 2011e 2012f 2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f HEV (NiMH) HEV (Li-ion) PHEV (Li-ion) BEV (Li-ion) Pessimistic total Optimistic totalSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  21. 21. Factors affecting future consumption ofNd, Pr and Dy in magnets• Demand for REEs in magnets is forecast to grow at 6-8% to 2016 – much of this growth will be related to continuing demand for use in consumer electronic equipment (as well as electric bicycles in China)• Higher growth rates likely from 2016 if “green technology” applications materialise• Concerns about high prices and availability could limit the extent to which NdFeB permanent magnet direct drives are adopted for wind turbines• Similarly, motor manufactures are seeking alternatives to permanent magnet motors in electric vehicles• Dy is seen as the limiting factor and research is underway in Japan and the USA to identify ways of reducing intensity of use – already cut by half in some magnets• Hitachi, Showa Denko and Mitsubishi Materials are all researching ways of recycling REEs from discarded hard disc drives and other appliances Roskill Approachable. Independent. Expert.
  22. 22. Phosphors Roskill Approachable. Independent. Expert.
  23. 23. Demand for rare earths in phosphors and pigments estimated at 8,750t in 2012 Demand for rare earths in phosphors and pigments, 450 2000 to 2017 (Y in 2000 = 100) • Driven by growth 400 in phosphors for fluorescent 350 lamps in LCD 300 backlights and 250 general lighting 200 • But new LED 150 technologies require less 100 phosphor 50 0 • ~65% China 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f 2017f • ~20% Japan and Y Ce Pr La Eu Gd Tb Nd Er other AsiaSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  24. 24. Demand for REEs in phosphors grew steadily between 2000 and 2010 at 4-5%py - growth over the next five years is forecast at 6-8%py as the negative impact of declining CRT sales is factored out World: Estimated consumption of selected • Demand for REEs in phosphors was REEs in phosphors 2000-2017f, (tREO) limited in the last decade by the decline in demand for CRT display screens; 9,000 phosphors are used in LCD screens but 8,000 at a lower intensity than in CRTs 7,000 6,000 • Most of the growth has come from lamp 5,000 phosphors used in fluorescent lamps – 4,000 latterly driven by phasing out of 3,000 incandescent lamps and increasing use as LCD backlights 2,000 1,000 0 • Beyond 2017/18 rates of growth may 2000 2012 2017F depend on the extent to which LED Tb Eu Y lamps replace fluorescent lampsSource: Roskill estimates Roskill Approachable. Independent. Expert.
  25. 25. In 2002, CRT screens accounted for 30% of phosphor demand – by 2011 it was just 1% World: Phosphor market 2002 and 2011 (%) 100 90 80 70 60 PDP CCFL LCD backlight % 50 CRT 40 Fluorescent tube (3 wave) Fluorescent tube (white) 30 20 10 0 2002 2011Source: Advanced Materials, Japan Roskill Approachable. Independent. Expert.
  26. 26. Factors affecting future consumption ofY, Eu and Tb in phosphors• Demand for REEs in phosphors forecast to grow at 6-8% to 2017 – much of this growth will be related to continuing demand for rare earth phosphors in fluorescent lamps• The heavy rare earths used in phosphors are not vulnerable to substitution in the medium-term. Extensive research into alternatives has not been successful• Research is now focused on increasing phosphor efficiency and reducing the use of high value REEs, such as Eu and Tb, as dopants• Substitution of LED lamps for fluorescent lamps could reduce rates of growth in the longer term. LEDs use less rare earth phosphors in their manufacture – and some use none• In Europe a system for recycling fluorescent lamps has been in place for some time – but until 2012, rare earths were not recovered. Rhodia is processing materials recovered from waste lamps at two plants in France and could produce “several hundred tonnes per year” Roskill Approachable. Independent. Expert.
  27. 27. Other applications Roskill Approachable. Independent. Expert.
  28. 28. Demand for rare earths in metallurgical and catalyst applications Demand for rare earths in Demand for rare earths in metallurgy, 2000 to 2017 catalysts, 2000 to 2017 1,200 (La in batteries in 2000 = 100) (La in FCCs in 2000 = 100) 250 1,000 200 800 150 600 100 400 200 50 0 0 La Ce Ce La Nd Gd Pr Hatched - batteries La Ce Ce La Nd Ce Hatched - FCCs Solid - other Solid - autocatalysts Spotted - otherSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  29. 29. Demand for rare earths in polishing and glass applications Demand for rare earths Demand for rare earths in in polishing, 2000 to 2017 (Ce in glass, 2000 to 2017 traditional applications in 2000 = 100) (Ce in display panels in 2000 = 100) 250 120 200 100 80 150 60 100 40 50 20 0 0 Ce La Pr Nd Ce Solid - traditional applications Ce La Er Nd Hatched - display panels Hatched - electrical components Solid - optical glass Spotted - otherSource: Roskill estimates Bloomberg Roskill Approachable. Independent. Expert.
  30. 30. Regional demand Roskill Approachable. Independent. Expert.
  31. 31. China will continue to dominate global demand World: Total demand for rare earths in China and ROW, 2000 to 2017 (%) 100% • China accounts 90% for nearly 70% of 80% demand in 2012 70% 60% • Chinese demand 50% will continue to 40% grow at the 30% expense of ROW 20% 10% • Chinese demand 0% is expected to exceed 70% by 2019/20 China ROWSource: Roskill estimates Roskill Approachable. Independent. Expert.
  32. 32. China is the largest market for rare earth oxides and metals – and demand is increasingly from higher value applications such as magnets and phosphors, rather than lower value applications in metallurgy and agriculture 9% Magnets 6% 23% Metallurgy Catalysts 7% Polishing 81,500t Glass 8% in 2012 Phosphors Ceramics 10% 23% Other 14%Source: CREIC and Roskill estimates Roskill Approachable. Independent. Expert.
  33. 33. Outlook for demand Roskill Approachable. Independent. Expert.
  34. 34. Growth in demand for neodymium in magnet applications will continue to be the main driver in the LREE sector World: Forecast demand for LREEs 2000 to 2017 (La in 2000 = 100) 800 700 600 500 400 300 200 100 0 La Ce Pr Nd SmSource: International trade statisticsSource: Roskill estimates Roskill Approachable. Independent. Expert.
  35. 35. Manufacturers have recognised limitations on supply of Tb and Dy – Tb was engineered out of magnet formulations and research continues into reducing the Dy content of the magnet alloy World: Forecast demand for HREEs 2000 to 2017 (Eu in 2000 = 100) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Eu Gd Tb Dy Er Y Ho,Tm,Yb,LuSource: Roskill estimates Roskill Approachable. Independent. Expert.
  36. 36. Meeting the demands of the market• In 2012 there is a discontinuity between the natural occurrence of REEs and the ratio in which they are consumed• The likely shortages of heavy rare earths (and possibly neodymium) will also occur in China – how will this affect Chinese government policies – could it lead to more restrictions on supply to the ROW• Supply of neodymium is tight but should ease from 2014/15 – will this additional supply be sufficient to assure potential users of NdFeB magnets for wind turbines and electric vehicles that feedstock is sustainable?• It is unlikely that there will be any significant supply of HREEs from the ROW before 2016/17 – companies dependent on a secure supply of dysprosium, terbium and europium rely on the developing dynamics of the REE industry in the south of China Roskill Approachable. Independent. Expert.
  37. 37. Roskill Consulting Group • Market assessments • Feasibility studies • Industry analyses • Due diligence • Competitive evaluation studiesFacing a major decision? We help you explore the impact on the market - and the impact on you Contact Judith Chegwidden judith@roskill.co.uk Roskill Approachable. Independent. Expert.

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