Rare Earth Metal Insights: Q1 2012 

Key insights

• Prices of REEs increased by 1.2–14.0 times in the first half of 2011, depending on the element. However, prices started to decline from their mid-year highs due to a market surplus, substitution and recycling of rare earth elements (REEs).
• Exports from China are expected to remain constant or even decrease in the next few years. Projects outside China will be expected to meet the growing international demand for REEs.
• Overall demand for REEs has been forecast to increase at 7-9 percent through 2015.
• Since China has been the major source of REEs over the past decade (contributing more than 97 percent of market supply), international efforts are focused on reducing dependence on Chinese suppliers and developing alternative sources.
• China has reduced export quotas for REEs from 65.61kt in 2005 to 31.13kt in 2012. With the aim to reduce market price volatility, the Chinese government has decided on separate export allocations for HREEs and LREEs versus maintaining a general export quota for all REEs.
• Historically, magnets and catalysts have been the primary demand drivers for certain REEs. Demand for magnets has been driven by high growth rates of hard disc drives, personal audio equipment, wind turbines and small electronic motors used in some cars.