Global rare earth stocks are drawing renewed attention as demand for neodymium-iron-boron (NdFeB) magnets is expected to more than double by 2035, driven by the growth of electric vehicles, robotics, and advanced air mobility.
Companies like MP Materials (NYSE:MP) and Iluka Resources (OTC:ILKAY) are emerging as key players in Western supply chains, backed by government partnerships and investments.
Bank of America Securities analyst Lawson Winder emphasized that the Western supply of rare earths remains nascent, with MP Materials standing out as the unmatched vehicle for investors seeking exposure to growing demand.
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Speaking after attending the second annual Rare Earth Mines, Magnets & Motors (REMM&M) conference in Toronto, the analyst outlined how surging demand for magnets, limited non-China supply, and evolving pricing models create both opportunities and risks for the global supply chain.
Adamas Intelligence projected that global demand for neodymium-iron-boron (NdFeB) magnets would more than double by 2035, with U.S. demand rising fivefold and EU demand growing 2.5 times, he noted.
Electric vehicles, robotics, and advanced air mobility have the potential to drive this growth, with EV magnet consumption alone forecasted to triple by 2035, Winder noted.
While the U.S. and Europe are ramping up domestic magnet-making capacity, set to increase thirteenfold by 2030, supply will lag demand, leaving both regions dependent on imports, the analyst said. To truly reduce reliance on China, upstream rare earth oxide supply outside of China must double by 2035, he said.
MP Materials benefits from a landmark partnership with the U.S. Department of Defense, Winder noted. This deal secures offtake for MP's expanded capacity and sets a minimum floor price for NdPr oxide (Neodymium-Praseodymium oxide), as per the analyst.
MP's fully integrated supply chain, spanning mining, refining, magnet making, and recycling, was pivotal in securing the deal, he said.
Winder highlighted that physical AI, which integrates advanced robotics and automation, is emerging as a key source of demand for rare earths, positioning MP and its peers at the center of this next industrial wave.
The analyst noted that Chinese index pricing for rare earth oxides does not reflect Western fundamentals, making government intervention necessary.
Iluka remains on track to commission its facility in 2027, backed by Australian government financing, Winder noted. However, industry leaders cautioned risks such as oversupply, anti-competitive behavior, and technological stagnation could emerge, the analyst said.
He argued that Western efforts to build rare earth supply chains mark the beginning of a rare earth renaissance.
Winder believes growing demand across EVs, robotics, and advanced mobility, combined with government-backed supply initiatives, will create considerable opportunities for producers.
Within his North American coverage, the analyst reiterated MP Materials as the best-positioned company to capture long-term growth from the rare earth magnet market.
Price Action: MP stock was trading higher by 5.45% to $74.82 at last check Friday. ILKAY was up 2.68%.
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