Terbium Prices

Terbium Price Forecast

Terbium, a cornerstone in high-tech innovations such as high-temperature fuel cells and permanent magnets, has witnessed extraordinary price movements in recent years. Between 2017 and 2022, terbium prices soared by an impressive 375%, outperforming all other rare earths. This meteoric rise was driven by booming demand for green technologies like electric vehicles and wind turbines. However, after such a prolonged rally, the market experienced a natural correction, with prices declining 45% in 2023 and a further 30% so far in 2024. These corrections appear to be temporary, as several factors point toward a potential rebound in the near future.

The Unique Supply Challenge of Terbium

Terbium is one of the rarer rare-earth elements, never found as a free element in nature and extracted painstakingly from minerals. Like other rare earths and technology metals, terbium’s production is inflexible; when demand rises, supply cannot rapidly adjust, leading to rigid and inelastic market conditions. This inflexibility means the demand for terbium can shift from calm to crisis, causing price spikes.

Moreover, terbium plays a critical role in manufacturing supply chains. A disruption in its availability could create a “single point of failure scenario,” where the absence of this element halts entire production lines. Manufacturers cannot afford such shutdowns, especially in industries like consumer electronics (e.g., iPhone production). When terbium prices spike, manufacturers absorb these costs and eventually pass them on to consumers. This dynamic underscores the essential nature of terbium in modern manufacturing and its vulnerability to supply shocks.

Geopolitical Influences and Supply Constraints

China dominates rare earths and terbium production, accounting for over 95% of the global supply, with its monopoly over refining and processing adding another layer of control. With Donald Trump re-elected as U.S. President, trade tensions between the U.S. and China are expected to escalate, potentially leading to supply chain disruptions. Historical precedents, such as the 2010 rare earth embargo during a territorial dispute with Japan, highlight the risk of export restrictions. Recent moves by China, such as its export controls on gallium and germanium in 2023, suggest terbium could face similar constraints.

In addition, recent reports indicate that rare earth mining in Myanmar, a significant source of heavy rare earths like terbium, has halted due to geopolitical instability. Myanmar contributes approximately half of the world’s production of heavy rare earth elements. The cessation of mining activities there could lead to shortages and subsequent price increases for terbium.

Demand Dynamics and Market Outlook

Despite recent corrections, the demand for terbium is expected to remain robust, driven by its indispensable role in green technologies, electric vehicles, and wind turbines. Analysts from Fitch Ratings project that energy transition metals like terbium will see sustained demand through the 2040s as global low-emissions infrastructure continues to expand.

The current price correction may present an attractive opportunity for investors to acquire terbium at a lower cost ahead of a potential rebound. Terbium’s unique market dynamics, characterized by its scarcity, inelastic supply, and critical applications, highlight its potential for substantial long-term returns. While prices may fluctuate in the short term, the strategic importance of terbium positions it as a valuable asset in an increasingly electrified and technologically driven world.

The 10-year forecast graphs below, by Argus Media, show terbium’s future price (fob China), demand, and supply estimates.