Mar 24 2015
60 Minutes is an American television news programme that is broadcast on the CBS television network. Shares in Molycorp, the only North American producer of rare earths, leapt +22% pre-market the morning after this programme aired a 60 Minutes on rare earth elements on 22 March 2015. The news item highlighted US concerns about security of supply for rare earths, a set of 17 chemical elements that share similar properties and are often found together in geological deposits.
The dynamics of rare earths supply are changing according to a new report from Roskill.
The 15th edition of Roskill's rare earths report, "Rare Earths: Market Outlook to 2020" draws on more than 40 years of independent research into these metals from the world's experts in metals and minerals markets. The global industry is expected to undergo significant changes before the end of 2015, as new sources of supply are scheduled to be commissioned and supply in China consolidates under a limited number of State-Owned Enterprises. Measures taken to control production in China have become more effective, resulting in a decline in both official production and unofficial production. In early 2015 still China accounts for more than 88% of world production but this is expected to fall to 75% by 2020.
As Roskill pointed out recently at international rare earths conferences in Europe and Asia, an increasing proportion of Chinese supply is now required for its domestic industries, which account for more than 70% of total demand for rare earths. New projects in the rest of the world could contribute an additional 45,000t REO to supply by 2020. CBS conducted its investigation of this industry between 2014 and early 2015 partly to highlight the strategic importance of rare earths amid new doubts over the timing of these start-ups. Prevailing prices at the beginning of 2015 are not supportive of some existing supply, let alone new production and delays in some phased start-ups have therefore been factored into Roskill's forecasts.
Market growth is expected to average 6%py overall between 2014 and 2020 but this headline figure masks different growth rates in each end-use and for the 17 individual rare earths, all of which have their own unique applications. The highest growth rates will be for magnets, catalysts and ceramics with average annual growth rates of more than 5% over the forecast period.
The rare earths value chain is complex, with multiple players, business drivers, supply models and geopolitical considerations at various stages of production. Executives in the industry need an experienced and independent overview of the end-to-end value chain that provides insight into both potential opportunities and avoidable disruptions.
Rare earths production, trade, prices and end user markets are analysed in detail in the new March 2015 edition of Roskill's rare earths report. The 15th edition of this Roskill report profiles over 300 producers and end users of rare earths, providing an overview of the entire supply chain.
This latest edition is available at of £5200 / US$8300 / €6200 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44(0)20-8417-0087, Email: [email protected] Web: http://www.roskill.co.uk/rare-earths.
Source: http://www.roskill.com/