Permanent Magnets:
the Demand for Rare Earths
Suzanne Shaw
Roskill Information Services
and
Steve Constantinides
Arnold Magnetic Technologies
8th International Rare Earths Conference
November 2012
Roskill
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Disclaimer
The statements in this presentation represent the considered views of Roskill
Information Services Ltd. and Arnold Magnetic Technologies (the “Presenters”). It
includes certain statements that may be deemed “forward-looking statements”. All
statements in this presentation, other than statements of historical facts, that
address future market developments, government actions and events, are forwardlooking statements. Although the Presenters believe the outcomes expressed in
such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results or
developments may differ materially from those in forward-looking statements.
Factors that could cause actual results to differ materially from those in forwardlooking statements include changes in general economic, market or business
conditions.
While the Presenters have made every reasonable effort to ensure the veracity of the
information presented we cannot expressly guarantee the accuracy and reliability of
the estimates, forecasts and conclusions contained herein.
Accordingly, the
statements in the presentation should be used for general guidance only.
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Summary
 Overview of the rare earths market
 Permanent magnets – current market trends
 Future demand for permanent magnets
 Consumption of rare earths in permanent magnets
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Overview of the
rare earths market
Roskill
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Global demand for rare earths
by end-use in 2012
World: Demand for rare earths
by end-use, 2012 (%)
• World ‘official’ production of REO
~110,000t in 2012, 85-90% in
China
Magnets
7%
6%
21%
Metallurgy
Catalysts
7%
Polishing
• World demand ~120,000t in 2012,
65-70% in China
8%
Glass
120,000t
Phosphors
20%
13%
Ceramics
Other
18%
Source: Roskill estimates
Roskill
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Demand for rare earths by element in 2012
Other HREEs
magnets, lasers, phosphors,
glass, metallurgy, other
Pr Other HREEs
3%
5%
Pr
Y
7%
Ce
40%
Y
Pr
magnets, phosphors,
ceramics, metallurgy,
polishing, other
Y
phosphors, ceramics,
other
Nd
18%
La
metallurgy, catalysts, glass,
phosphors, ceramics,
polishing, other
Nd
La
La
26%
Ce
polishing, metallurgy,
catalysts, glass, phosphors,
ceramics, other
Nd
magnets, ceramics,
metallurgy, glass, catalysts,
phosphors, other
Source: Roskill
estimates
Bloomberg
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China continues to dominate global demand
World: Total demand for rare earths in China and
ROW, 2000 to 2017 (%)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
China
•
China is leading demand - 70%
in 2012
•
Demand is increasing from
higher value applications
•
Chinese demand to exceed 70%
by 2019-20
ROW
Source: Roskill estimates
Roskill
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Permanent magnets – current
market trends
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What are rare earth magnets
•NdFeB (neodymium iron boron, aka ‘neo’ magnets)
–
–
–
–
Powder for bonded magnets: compression, extruded, injection molded
Sintered (powder metallurgy)
Hot rolled (no longer made): modified composition; Seiko-Epson
Die-upset / forged, fully dense: Magnequench MQ-3 process (original and
modified); Daido Electronics
•SmCo
– Sintered (powder metallurgy)
•SmFeN
– Powder metallurgy process resulting in a fine powder suitable for bonded
magnets
– Unstable above ~450 C – no known method for achieving a fully dense
magnet
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Types of permanent magnet
Source: Arnold Magnetic Technologies
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Different magnets for different needs
Usable Temperature Range
for Common Permanent Magnets
Ferrite
Neo
Alnico
SmCo
0
-275 -200 -125
-50
25
100
175
250
325
400
475
550
Temperature, ºC
Source: Arnold Magnetic Technologies
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Over the next 8 years demand for NdFeB magnets is
forecast to grow by around 9%pa – accelerated growth
after 2016
1,400
12,000
1,200
10,000
1,000
8,000
800
6,000
600
4,000
400
Magnet value (US$M)
Magnet production (kt)
World: Permanent magnet production and value by type, 2005 to 2020
2,000
200
0
0
NdFeB production
Other permanent magnet production
NdFeB value
Other permanent magnet value
Source: International
Benecki, Clagett
Trout, Permanent Magnets 2010-2020
trade& statistics
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China will maintain its position as the leading
supplier of NdFeB magnets
World: NdFeB magnet production by region, 2005 to 2020 (kt)
140
120
100
80
60
40
20
0
2005
2006
2007
2008
2009
China
2010f
Japan
2011f
2012f
Europe
2013f
2014f
2015f
2016f
2017f
2018f
2019f
2020f
Other regions (including USA)
Source: International
Benecki, Clagett
Trout, Permanent Magnets 2010-2020
trade& statistics
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Applcations for RE permanent magnets
Rare Earth Magnets by Application, 2012 year-end forecast
12.0%
2.6%
3.4%
34.4%
4.1%
Motors & Generators
HDD, CD, DVD
Transportation
Energy Production and Storage
Transducers
5.6%
Drives, Clutches, Braking
Relays, Sensors, Switches
6.2%
Appliances
Wave Guides
All Other
7.2%
13.6%
10.9%
Source: Arnold estimates
Roskill
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Future demand for
permanent magnets
Roskill
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Traditional markets: Consumer electronics
• Important driver for permanent
magnet demand over the last 25
years
• Future growth at lower rate
reliant on such issues as
 Replacement in mature
markets
 Expansion of cloud computing
 Long-term substitution with
new technologies such as SSD
(solid state drives).
15,000
13,000
Magnets, tons
• Shipments of HDDs alone were
an estimated 660 million units in
2011 (~9,000t NdFeB)
Neo Magnets in HDDs, CDs and DVDs
11,000
9,000
7,000
5,000
2008
2009
2010
2011
2012
2013
2014
2015
HDD sales from iSuppliCorp: www.isuppli.com
Source: Arnold estimates
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Traditional markets: Standard automotive
• Engine components, battery components, moving car parts and other
integral systems – larger magnets, ferrite and NdFeB
• Interior applications – smaller magnets, typically NdFeB
• Around 40 magnets in motors and actuators, and 20 sensors in a
typical car
• Average of 250g NdFeB and 10-20g SmCo
 Primarily in small motors and sensors
• Car and light vehicle production
 80M units 2011 ~ 20,100t NdFeB
 Forecast 90-95M units by 2015, but increasing intensity of use
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Traditional markets: Electric bicycles
• Large and growing market, mainly in Asia
• >16M produced in China in 2008 and >30M in
2011
• Production increasing but so is legislation to
discourage use
 Banned in South China cities of Guangzhou,
Dongguan and Shenzhen
 Vehicles of 20 kg or more and a top speed of
30 km/h will require a motorcycle license to
operate
Roskill
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Will future growth come from wind turbines?
Global growth in wind turbine capacity, 1996 to 2011 (MW)
300,000
• Global growth in
wind turbine
capacity of 27%py
2000 to 2011
250,000
200,000
150,000
• Global capacity
could reach
450GW by 2020,
led by growth in
China
100,000
50,000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Annual
Cumulative
Source: Global Wind Energy Council
Roskill
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Growth in wind energy dominated by China
Top 10 cumulative capacity,
Dec 2011 (%)
Top 10 new installed capacity,
Jan-Dec 2011 (%)
Others
Portugal 13%
Canada
2%
2%
Others
13%
China
26%
UK
3%
France
2%
Spain
3%
Italy
3%
France
3%
Sweden
2%
China
44%
Italy
2%
Canada
3%
UK
3%
Germany
5%
India
7%
USA
20%
Spain
9%
Germany
12%
India
7%
USA
16%
Source: Global Wind Energy Council
Roskill
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Wind turbine generator type and location
Generator Design
Generator
rpm
(approx.)
Induction
(no Permanent Magnets)
1800
Half Speed
(200 kg magnets/MW)
800
Direct Drive
(600 kg magnets/MW)
12
Superconducting
(no Permanent Magnets)
??
Generator Output in MegaWatts (MW)
<1
>10
Land-based
older technology
Land or offshore
hybrid drive, simpler gearbox
Mostly offshore
Land or offshore
Source: Arnold Magnetic Technologies
Roskill
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Direct and hybrid drive wind power turbines
containing NdFeB
• Very little of the current installed capacity contains rare earths
 Small and early commercial turbine designs used induction generators
 Some small turbines converted to permanent magnets to improve efficiency
 Generation-4 wind power generators designed to use permanent magnets for
commercial power production
• Only new design, Generation-4, large-size direct drive or hybrid (half-speed)
turbines rely on large quantities of NdFeB magnets
• Direct drives are favored for large offshore turbines.
 These turbines have a higher production cost due to recent magnet prices but
are more efficient and reliable
• Other sources of renewable energy may also utilise permanent magnet
generators
 Examples are tidal and wave power turbines
Source: Bloomberg
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Direct and hybrid drive wind power turbines
containing NdFeB
• The European Joint Research Centre estimates that turbines containing
permanent magnet motors will account for 15% of global market share by 2020,
increasing to a possible 20% by 2030
• Optimistic forecasts predict direct drives to grow by 50-60% 2012-2013, led by
growth in China, followed by slower growth of 10-20% to 2015 once penetration
stabilises
• However, companies still offer traditional geared models for smaller turbines and
could easily revert to this technology if Nd prices rise to unsustainable levels
• What is the future for direct drives in China?
Source: Bloomberg
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Will future growth of come from EV/HEVs?
500,000
US Sales of Hybrid, PHEV and EV
Cars, SUVs, Light Trucks
450,000
All Others
Mazda
Mercedes
400,000
Annual Sales, Units
Acura
350,000
Mitsubishi
Infiniti
300,000
Series11
BMW
250,000
VW & Porsche
Nissan
200,000
Kia
Ford & Mercury
150,000
Honda
Hyundai
100,000
Lexus
GM
50,000
1999
Toyota
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012F
Actual sales in the US; 2012 through August annualised
Source: www.hybridcars.com
Bloomberg
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Will future growth come
from EVs/HEVs?
10,000
BYD e-Bus
World: Forecast production of EVs/HEVs by type,
2010 to 2025 (000 units)
9,000
8,000
7,000
• Production of EVs/HEVs
could reach 3.2-9.2
million by 2020
• In particular, HEV motor
systems often rely on
NdFeB magnets
6,000
5,000
4,000
3,000
2,000
1,000
0
2011e
2012f
2013f
2014f
2015f
2016f
2017f
2018f
2019f
HEV (NiMH)
HEV (Li-ion)
PHEV (Li-ion)
BEV (Li-ion)
Pessimistic total
Optimistic total
2020f
• Toyota and others are
looking at induction
motors in EVs in case the
price of Nd becomes
unsustainable or supplies
are undependable
Source: Roskill
estimates
Bloomberg
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Consumption
of rare earths
in permanent magnets
Roskill
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Over the last decade demand for Nd more than doubled
– driven by increased use of NdFeB magnets in
electronic equipment rather than “green” applications
40,000
World: Demand for rare earth elements in
magnet manufacture, 2000 and 2010 (tREO)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2000
2010
Tb
Gd
Sm
Dy
Pr
Nd
Source: International
Roskill estimates
trade statistics
Roskill
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Demand for rare earths in permanent magnets
estimated at 25,500t in 2012
Demand for rare earths in permanent magnets,
2000 to 2017 (kt)
• 96% NdFeB, growth
driven by consumer
electronics, standard
automotive, air
conditioning, electric
bicycles
• 3% SmCo
for specialist, high
temperature
applications
• 1% SmFeN
for bonded magnets
• ~78% China
• ~22% Japan, other
Asia and Europe
Source: Roskill
and Arnold estimates
Bloomberg
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Factors affecting future consumption of
Nd, Pr and Dy in magnets
• Demand for REEs in magnets is forecast to grow at 6-8% to 2016 – much of this
growth will be related to continuing demand for use in consumer electronic
equipment (as well as electric bicycles in China and southeast Asia in general)
• Higher growth rates likely from 2016 if “green technology” applications
materialise
• Concerns about high prices and availability could limit the extent to which NdFeB
permanent magnet direct drive generators are adopted for wind turbines
• Similarly, auto manufacturers are seeking alternatives to permanent magnet
motors in electric vehicles
• Additional sources of rare earths are still to be established; adequate light rare
earths (Nd and Pr) are expected to be available
• The key ingredient is the heavy rare earth, Dy (dysprosium), which is required for
neo magnets to perform at elevated temperatures - supplies of Dy are expected
to remain tight
Roskill
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Factors affecting future consumption of
Nd, Pr and Dy in magnets
• Dy is seen as the limiting factor
•
Research is underway in Japan and the USA to identify ways of reducing intensity of
use – already cut by half in some magnets
• Technologies in-play or under research include
•
•
•
•
•
Diffusion of Dy into the neo magnet to reduce the total quantity required
Induction and synchronous reluctance traction drive motors (no magnets)
Research on nano-structured and exchange-coupled magnet materials with reduced
or no rare earth content
Lower application temperature to reduce demand for Dy
Superconducting generators for wind power
• Recycling (or re-use) is a major thrust area
•
•
Hitachi, Showa Denko and Mitsubishi Materials are all researching ways of recycling
REEs from discarded hard disc drives and other appliances
A variety of organisations are seeking to increase recycling such as the Center for
Resource, Recovery and Recycling (CR3, www.wpi.edu/academics/Research/CR3/)
Roskill
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Future consumption of NdFeB
• Consumption of NdFeB
magnets constrained by
lack of availability of
dysprosium
150,000
125,000
Tons, RE Magnets
Without Dy constraint
100,000
75,000
With limited Dy availability
50,000
• After 2015: minor additional
sources of dysprosium allow
the market to expand slowly
25,000
0
2005
• Between 2010 and 2015:
influence of Dy-diffusion
technique and device
temperature control will
permit modest growth
2010
2015
2020
Chart based on existing technology regarding use of Neo at elevated temperatures and upon max use requirements of applications
Source: Arnold Magnetic Technologies
Roskill
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Meeting the demands of the market
• In 2012 there is a discontinuity between the natural occurrence of REEs and the
ratio in which they are consumed
• The likely shortages of heavy rare earths (and possibly neodymium) will also
occur in China – how will this affect Chinese government policies – could it lead
to more restrictions on supply to the ROW?
• Supply of neodymium should ease from 2014/15 onward permitting expanded
Neo magnet use in electronics and other lower temperature applications
• It is unlikely that there will be any significant supply of HREEs from the ROW
before 2016/17 – companies dependent on a secure supply of dysprosium,
terbium and europium rely on the developing dynamics of the REE industry in
the south of China
Roskill
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