Why are rare earth prices rising so fast?
Raw materials
Posted by MoneyController on 26.09.2023
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The price of rare earths is rising: what are the reasons and what are the prospects for this strategic market in technology, sustainability and beyond?
There are two reasons why rare earth prices have risen in recent months and weeks. The first is medium to long term and relates to the increase in demand for components related to technological devices and renewable energy. The second reason, as Reuters explained in an article on 7 September, is that Myanmar has temporarily suspended production to allow an inspection visit to the Kachin State region of Myanmar, an area rich in rare earths and bordering the People's Republic of China, an economic giant that influences the raw materials market.
The temporary closure in Kachin State has led to a record rise in Chinese prices for rare earths, some of which have reached unprecedented levels in the last twenty months. In fact, Myanmar exports 38% of its rare earths to China. As we further read in Reuters, quoting Project Blue analyst David Merriman, this disruption is expected to affect production, possibly for the next two months (despite the increase in Chinese imports from Laos).
Rare earths are a group of fifteen chemical elements used in a variety of applications. "Geopop" reports on a useful study carried out in Canada (and presented on the Statista portal), which shows the sectors with the highest demand for rare earths: the production of magnets and batteries, but also the oil, glass, metallurgy and ceramics industries.
ResearchAndMarkets.com estimates that the rare earths market will grow at a CAGR of 4.2% from 2023 to 2030. According to the ResearchAndMarkets.com report, what is accelerating the market today is the use in the realisation of sustainable technologies: on the one hand in the production of renewable energy, and on the other in the realisation of electric cars. The importance of rare earths, however, is demonstrated above all by their use in electronic components and the military.
Read also
Rare earths, a critical resource: what are they and where are they found?
