The scandium market is expected to register a CAGR of around 11% (in terms of volume), during the forecast period. The major factors driving the growth of the market studied are the accelerating usage in solid oxide fuel cells (SOFCs), and the rising demand for aluminum-scandium alloys.
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However, lack of awareness, high cost, and inconsistent supply are restraining the growth of the market studied.
- The shifting focus toward the usage in the automotive industry and Australia’s emergence as a new growth hub is likely to provide opportunities for the market studied, during the forecast period.
- The United States dominated the global market, owing to the growing usage in the automotive industry, and high demand from aerospace, defense, and electronic industries.
Key Market Trends
SOFCs Segment to Dominate the Market
- A solid oxide fuel cell (SOFC) is an electrochemical conversion device that helps produce electricity directly by combining an oxidant and a fuel across an ionic conducting oxide electrolyte.
- SOFCs use a solid oxide material as an electrolyte, which helps conduct negative oxygen ions from the cathode to the anode. In these cells, anode and cathode are made from special inks that cover the electrolyte. Therefore, SOFCs do not require any precious metal, corrosive acids, or molten material.
- In these cells, electrolyte materials are subjected to high temperatures to catalyze the conversion of natural gas to energy. The high temperature for the catalyzing conversion process can, however, lead to the quick degradation of ceramic electrolyte, adding to the capital and maintenance cost.
- Therefore, the use of scandium in solid electrolytes helps the system operate at much lower temperatures than conventional SOFCs. Thus, the application of scandium has helped in lowering the costs of SOFCs, facilitating its wide-spread adoption for distributed power generation.
- With rising electricity prices, the need to resort to sustainable power generation method is expected to create huge market opportunities for the SOFCs market, thus increasing the importance of scandium.
- Scandium containing SOFCs have commercially proved to offer outstanding performance as compared to the conventional yttrium stabilized zirconia solid electrolytes. This is because, the use of scandium-based electrolytes has helped increase ionic conductivity, cell efficiency, and operating life of the fuel cells.
- At present, SOFCs are witnessing increased application within transport, industrial equipment, power generation, cooling, disaster relief, and areas where grid connections are not available.
- The increasing demand for clean energy over environment concerns of energy generation from conventional sources, such as coal and natural gas, is expected to drive the demand for solid oxide fuel cells in the years to come. Consequently, such trends are projected to significantly increase the demand for scandium for applications in SOFCs.
United States to Dominate the Market
- The economy of the United States witnessed a growth rate of 2.3% in 2019 Y-o-Y over 2018. According to the International Monetary Fund (IMF), the nation’s GDP is expected to plunge to -5.9% in 2020 and pick up to 4.7% in 2021, subject to the post-pandemic global economic recovery.
- The United States is by far the worst affected country by COVID-19. To control the spread of the virus, various states in the country adopted complete lockdowns while the rest adopted partial lockdowns and imposing restrictions on various activities. Overall, in Q1 2020, the nation’s economy contracted by 4.8%, marking the first contraction in the economy since Q1 2014 and the lowest level since the 2008 financial crisis. In Q2, the economy further contracted by 5%.
- The United States was one of the early adopters of the commercial-scale deployment of fuel cells, which was supported by government funding with increased uptake by end-users, especially the automobile industry.
- The vast opportunities offered by the use of SOFC-based fuel cells as replacements for internal combustion engines in light-duty vehicles and warehouse forklifts to increase vehicle efficiency and support the goals of reducing oil usage and emissions from the transportation sector, which is likely to result in a significant increase in the deployment of fuel cells in the country.
- The United States leads the global fuel cell electric vehicle (FCEV) deployed worldwide, and as of 2019, the country deployed 8039 FCEVs in the country. California leads the deployment, where the Zero Emission Vehicle Program significantly supplemented the sales of FCEVs. Moreover, it is expected to remain the same in the coming years.
- By the end of 2020, the US Department of Energy (DOE) aims to reduce the price of an 80-kW fuel cell stack systems to about USD 40 – USD 30 per KW, at a high-volume production of 50,000 systems per year. With the reductions in the price of fuel cell stacks, efforts are also being undertaken to lower the cost of hydrogen production.
- Similarly, automobile giants, such as Honda and General Motors (GM), in collaboration with Fuel Cell System Manufacturing LLC, announced the setting up of the auto industry’s first manufacturing joint venture worth USD 85 million to co-produce fuel cell technology. The companies announced the establishment of a manufacturing facility in Michigan, United States, by 2020.
- The United States has the largest aerospace industry in the world. According to the Federal Aviation Administration (FAA), the total active general aviation fleet is expected to increase from 212,885 in 2018 to 211,575 aircraft by 2039, owing to the growth in air cargo. This is likely to increase the usage of scandium in the country, but due to the COVID-19 outbreak, the aerospace sector in the country has been majorly hit, which can have serious repercussions on the demand of scandium in aerospace applications.
- The military spending by the United States grew by 5.3% to reach a value of USD 732 billion in 2019, and it accounted for 38% of the global military spending. The huge military spending contributes to the huge market size for military aircrafts, which creates an immense potential demand for scandium.
- The US electronics market is the largest market in the world in terms of size. Furthermore, it is expected to remain the leading market over the forecast period, due to the usage of advanced technology, an increase in the number of R&D centers, and the rising demand from the consumers.
- The sports market in the Untied States is growing steadily, and it is expected to reach approximately USD 79 billion by 2021. The demand for sporting goods has been increasing over the past decade. The sporting goods market revenue is projected to reach USD 20.9 billion in 2024 compared to the USD 17.8 billion in 2019.
- The United States is the second-largest market for the electric vehicles after China. Electric vehicles sales rose by 80% in the United States in 2018, mainly driven by the market launch of the standard version of the Tesla Model 3. However, this growth slowed in 2019, owing to several factors. One of the reasons is the gradual phaseout of the federal fiscal tax credit in January and July 2019. The US sales for the year declined by 7%, or 12,400 units.
- The United States is turning out to be the global hotspot for COVID-19. The rapid spread and threat from the virus in the country are expected to take a toll on not only the economic growth and jobs in the country but also deteriorate the growth of the manufacturing sector and various other end-user industries in the short/mid-term, slowing down the previously expected demand for scandium in the country.
The global scandium market is a consolidated market with the presence of a limited number of players across the world. Scandium is traded privately between producers and buyers, with negligible government interference, except for Russian and Chinese trade. Some of the noticeable players in the market include Hunan Rare Earth Metal Material Research Institute, Huizhou Top Metal Materials Co. Ltd (TOPM), Scandium International Mining Corp., Clean TeQ Holdings Limited, and NioCorp Developments Ltd, among others.
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