The Rare Earth Challenge

2011

Rare Earth (RE) are a group of 17 metals which are required for many high tech applications – And they are not really "rare". Due to skyrocketing prices, RE have developed from a rather small and widely neglected market of ~2.4 bn Euro in 2008 to a multi-billion business of top strategic importance. This threatens the profitability and even the existence of many high tech companies. Affected companies are taking action:

• In all surveyed companies, RE are now a management/board level issue
• Companies prepare/apply several different strategies to tackle the RE challenge, especially "secure supplies" and "reduce usage"; applied levers vary

We have applied our proven scenario technique to forecast the RE price development:

• Prices for LIGHT RE are expected to decrease in the short to medium term depending on the behavior of China and the extent/timing of substitution
• Prices for HEAVY RE are expected to increase in the short term and stay constant/gradually decrease in the long term