Permanent magnets are made from a magnetized material that creates its own persistent magnetic field, and are either ferromagnetic or ferrimagnetic. These include cobalt, nickel, iron and alloys of rare earth elements as well as some naturally occurring minerals such as lodestone. Unlike temporary magnets such as electromagnets, permanent magnets do not lose their magnetic property unless they are heated above their curie temperature. Permanent magnets are industrially manufactured through casting or sintering, made from magnetic metallic elements, composites and rare earth materials. Neodymium-iron-boron (NdFeB), samarium cobalt (SmCo), alnico and ferrite are some of the examples of permanent magnets used in the industry. Growth of global automobile industry is expected to be a key factor driving permanent magnets market. The automotive industry is significantly growing owing to rising population and technological advancement led by the use of permanent magnets. They are widely used in automotives for a diverse range of applications including economy and pollution control. Certain components such as motors, alternators and gearboxes require permanent magnets in their mechanism. Large magnets, particularly NdFeB and ferrite are used in moving car parts, battery components, engine components and other integral systems.
Shift in trend towards renewable energy has also contributed to the growth of permanent magnets market. Permanent magnets play a significant role in wind energy generation. Permanent magnets are used in the stator of the wind turbine which is responsible for producing AC electricity. It is then converted into DC form which is used to charge batteries storing electrical energy or, is fed into a grid interactive inverter for providing power to the electricity grid. Demand for wind power generation has been significantly growing due to certain factors such as efficiency and economy. In addition, rising awareness regarding depletion of natural sources such as coal and forests has played a vital role in the growth of this industry. However, fluctuating prices of raw materials including Neodymium (Nd), Boron (B), Iron (Fe) and Dysprosium (Dy) is expected to inhibit the market growth over the forecast period. Owing to the price fluctuation, many large scale manufacturers had to replace NdFeB magnets with ferrite magnets for certain automotive and wind energy generation applications, while other medium scale and small scale companies were significantly affected, resulting in a shut down.
Key products analyzed and reported in this study include ferrite, Neo (NdFeB), SmCO and Alnico. Ferrite magnets emerged as the leading permanent magnet products consumed worldwide and accounted for over 80% of total market volume in 2012. However, in terms of revenue, ferrite magnets accounted for just over 20% of the total revenues for the same year. Ferrite magnets are relatively cheaper than other permanent magnets such as NdFeB magnets, SmCO and Alnico magnets and hence account for a relatively smaller revenue share in the overall market. NdFeB is expected to be the fastest growing type of permanent magnet at an estimated CAGR of 9.4% from 2013 to 2020. Growing awareness regarding the benefits offered by NdFeB over other magnets in high performance automotive applications is expected to drive its demand over the forecast period. SmCO and Alnico represented a very small market in terms of volume and together accounted for just over 3% of total volumes consumed in 2012. However, in terms of revenue, SmCO and Alnico accounted for close to 8% of total market revenues for the same year. The global market for SmCO magnets is expected to exceed USD 1.5 billion by 2020 at an estimated CAGR of 8.3% from 2013 to 2020.
Global permanent magnets volume share, by product, 2012
Key application markets analyzed and reported in this study include automotive, electronics and energy generation among some other applications. Certain automotive components such as motors, alternators and gearbox require permanent magnets in their mechanism which has been augmenting the growth of global market. Automotive emerged as the leading application segment for permanent magnets and accounted for close to 50% of total market volume in 2012. Automotive was followed by electronics which accounted for more than 25% of total volume in 2012. Energy generation is expected to be the fastest growing application segment at an estimated CAGR of 9% from 2013 to 2020. Wind power industry has been experiencing double digit growth rates since the last decade on favourable regulatory scenario around the world. Global installed wind power capacity was 282.8 GW in 2012 and is expected to exceed 750 GW at an estimated CAGR of 13% from 2013 to 2020. Europe led the global market for wind power in terms of installed capacity. However, rapid growth in China and India is expected to push Asia Pacific to overtake Europe by 2020. Growth of wind power market is expected to push the demand for permanent magnets over the next six years.
China emerged as the leading market for permanent magnets and accounted for 65% of global volume consumed in 2012. Growth of automotive and wind energy generation markets in the nation on account of flexible regulations is expected to be a key driver for the market over the next six years. China along with being the largest market, is also expected to be the fastest growing market for permanent magnets at an estimated CAGR of 8.8% from 2013 to 2020. China was followed by rest of Asia Pacific which comprises of countries such as India, Japan, South Korea and Indonesia among some other countries. Together these countries accounted for 15% of total market volumes in 2012. North America accounted for 6% of total market volume in 2012 and is expected to grow at an estimated CAGR of 7.9% from 2013 to 2020. European market for permanent magnets is expected to exceed USD 3 billion by 2020.
The global market for permanent magnets is highly fragmented with a large number of small Chinese manufacturers operating in the market. These small manufacturers pose a constant threat to large manufacturers in terms of their product and price offerings. Some of the major companies operating in the global market for permanent magnets include Adams Magnetic Products Co., Hangzhou Permanent Magnet Group, Anhui Earth-Panda Advance Magnetic Material Co. Ltd and Hitachi Metals Ltd., Molycorp Magnequench and Shin-Etsu Chemical Co. Ltd among some other companies