Editorial
WTO complaint wakes up the rare earth market
Editorial
Saturday, 17 March 2012 19:57

flag-icon-cnThe 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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2012 rare earth window
Editorial
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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Time to do the math
Editorial
Monday, 09 May 2011 00:00

gold160x160After 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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