en.Wedoany.com Reported - According to a Platts news report by S&P Global on April 9, a significant influx of capital is pouring into the rare earth supply chain outside China. This financing boom could trigger a prolonged period of oversupply in the global rare earth market in the 2030s. Jack Baxter, a metals analyst at Bloomberg Intelligence, pointed out that any commodity market tends to end up in oversupply after experiencing large-scale investments.
Analysts indicate that in the short term, constrained by demand growth and supply bottlenecks, the global rare earth market will still face supply shortages. However, driven by national security concerns for defense supply chains, countries are actively sourcing rare earth materials from domestic sources or close trading partners. Coupled with price floors and financial support policies, this is leading to substantial capacity expansion. Baxter warns that capacity expansion will continue until the next marginal source of demand emerges.
Currently, the race to diversify the rare earth supply chain outside China is in full swing. A Bloomberg Intelligence report released in March this year shows that China accounted for about 90% of the global rare earth market value in 2024. It is projected that by 2030, with the ramp-up of mining capacity in regions like North America and Australia, China's market share will drop to 69%, but supply gaps will persist. According to Bloomberg Intelligence estimates, global public and private producers are expected to attract around $10 billion in financing in 2026 through capital injections, improved mine economics, and faster approvals. Industry executives, however, question analysts' predictions of oversupply, believing that short-term supply tightness will continue to dominate the market landscape.
The restructuring of the global rare earth supply chain is accelerating. U.S.-based MP Materials is investing over $1.25 billion to build the 10X Magnet Manufacturing Campus in Northlake, Texas, expected to commence operations in 2028. Upon completion, its total annual production capacity for NdFeB magnets will reach approximately 10,000 tons. Australia's Lynas Rare Earths produced 6,375 tons of rare earth oxides between July and December 2025, a 19% year-on-year increase, and plans to start producing separated samarium from April 2026. The Canadian government announced the establishment of a C$2 billion Critical Minerals Sovereign Fund to provide equity investments and loan guarantees for rare earth projects. Brazil's Meteoric Resources has applied for an installation license for its Caldeira rare earth project, with an estimated investment of $443 million. The dual push from national policies and capital is accelerating rare earth capacity expansion, laying the groundwork for potential oversupply in the 2030s.
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