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Editorial
WTO complaint wakes up the rare earth market |
Editorial
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Saturday, 17 March 2012 19:57 |
The United States, EU, and Japan
filed a formal complaint with the World Trade Organization (WTO) charging that China is limiting their export of rare earths. Rare earths are among the critical metals
used in numerous high tech products from cell phones to hard drives, wind turbines and guidance systems.
"We want our companies building those products right here in America," U.S. President Barack Obama said in a related statement early last week. "But to do that, American manufacturers
need to have access to rare earth materials which China supplies." While the U.S. was a leading producer of rare earths for high technology products in the past, the industry
collapsed following sufficient supply at low prices from China, until recently. Rare earth prices exploded last year as China cut production and exports, the reason for
the WTO complaint.
China had other things in mind regarding the dispute on rare earth exports, stating in the State news agency Xinhua that "it is strange that the Western world has never launched
'anti-dumping' measures against China's rare earth products as they have, more often than not, done to other China-made products such as shoes, shirts and tyres."
If the West wins the case, China would be required to raise its export quotas. China has until the end of March to respond, but the dispute could take years, according to
experts close to the matter. The EU, the United States, and Mexico gained a favorable ruling a similar case against China in January concerning other raw materials, according
to a Reuters story.
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Editorial
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Friday, 30 December 2011 00:00 |
The rare earth industry and its investors were taken for a wild ride in 2011. Economic uncertainty and supply issues created downward pressure on rare earth equities, after
a huge runup in rare earth prices. Some rare earth equities peaked in February, others began to slide in April.
The cost of rare earth metals fell after a few shot up dramatically in the first part of 2011. Prices for corresponding equities from the rare earths ETF (REMX) to North American vanguard Molycorp (MCP)
have ridden the roller coaster metaphor. Capitalization has fallen as dramatically. Rare Element Resources (REE)
provides an example, sliding from its 2011 opening of just over $17/share to almost $3 by year end. Some investors are surely wondering whether it's bargain time.
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Editorial
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Monday, 09 May 2011 00:00 |
After silver and gold's run and
recent correction, one question some might have is whether rare earth metals equities experienced a bubble in the big run up over the last year. Rare earth mining company
equity prices have certainly outpaced revenue to date, but it's too early for the mining companies to report full production revenue. Eventual oversupply (most likely
over two years away) poses longer term risks for stock pickers going long. So far though, stock prices have risen pretty well across the board for rare metals companies
during the last year. Nearly tripling since December 2010, potential rare-earth market leader Molycorp (MCP)
even outperformed Silver Wheaton (SLW), also considered a market leader in the silver and precious metals
space.
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