Roskill states that in the short term to 2021, neodymium-iron-boron (NdFeB) permanent magnet demand is forecast to grow strongly. The traditional consumer electronics and automotive sectors currently account for the majority of NdFeB demand, but growth is also expected from the emerging green technologies such as wind turbines and new energy vehicles (NEVs). Between 2016 and 2021, global NdFeB magnet production is forecast to grow by 4 – 5% per annum. Global NEV production is forecast to rise to around 3.5 – 4.0 million vehicles in the same period, while global wind power installations could increase by 0.4M MW according to Roskill’s report.
As a result of increasing consumption, neodymium (Nd) was expected have fallen into supply deficit in 2016, and this deficit is forecast to continue increasing to 2021. This would make continued growth of NdFeB magnets unsustainable, despite efforts by rare earth producers to increase neodymium supply. This is expected to result in price rises for Nd to a point where magnet consumers will begin to replace NdFeB magnet technologies with substitute materials. The green energy sector is the most vulnerable to NdFeB price rises because of the large size of magnets used in wind turbines. Technologies already in use in this industry include induction/synchronous generators in wind turbines as an alternative to permanent magnet motors, and induction motors in NEVs.
Roskill states that by 2021, it is expected that the high price of Nd and concerns over supply availability will make projected growth rates of NdFeB permanent magnets unsustainable, and demand for these magnets is forecast to fall rapidly from 2022, before stabilising at a much lower growth rate. Overall, NdFeB magnet growth between 2021 and 2026 is forecast to be flat, possibly falling by up to -1% per annum, but Nd prices will continue to rise. The price increase for most other rare earth metals will, however, be limited due to supply surpluses.
Demand for dysprosium will also grow from the use of magnets in high temperature applications (including NEVs) but manufacturers are actively trying to reduce dysprosium-containing magnet consumption wherever possible and to develop new ways to reduce intensity of dysprosium use.