Demand Forecasting in World Rare Earth Metals Market

Abstract

The rare earth metals (REM) market is relatively young, because its rapid development began only in the middle of the 20th century. Since then, global demand has been constantly growing with the development of human society, scientific and technological progress. This leads to an increase in production volumes at existing fields, new projects for the development of rare earth mineral resources are emerging all over the world, strategic reserves of raw materials are being created in countries with a developed high-tech industry in the conditions of China’s monopoly on the market. Therefore, it is important to understand the balance and dynamics of supply and demand in the REM market in the long term. Will manufacturers be able to increase capacity to meet the rapidly growing demand? What volume of REM will be in demand in the future, what is the structure of this demand?In this paper, demand forecasting in the global REM market up to 2050 is carried out on the basis of different scenarios. Estimates of the future level of demand were based on historical data in the context of consumption sectors. The forecasts results of three scenarios were compared: the exponential demand dynamics based on complete historical data, the continuation of the linear trend of the last decade using a regression model, and, finally, the inclusion in the regression model of forecast estimates of the growing demand for REM from the “green energy”, which are based on the report “The Role of CriticalMinerals in Clean Energy Transitions” of the International Energy Agency. Based on the results, an interval of forecast values of global demand for REM has been obtained, which can be satisfied by manufacturing companies from the supply side for the next 15–20 years (including domestic ones). However, there may be a shortage of some rare earth elements that are so in demand for the transition to “green energy”.