Rare earth prices to fade as China loses dispute, mines raise output

|By:, SA News Editor

Analysts say rare earth elements will continue to fall this year after China loses a trade dispute over its export controls, as new mines boost output and while demand in high tech products disappoints.

A price war could break out after the U.S., EU and Japan won their case over export restrictions they said gave Chinese companies an unfair competitive edge in key sectors, says Ryan Castilloux of Adamas Intelligence; China's "only tangible defense becomes competing head-to-head on price with emerging global producers."

Investors already are concerned about excess supply as Molycorp (MCP -3%) and Lynas (LYSCF -12.5%) boost output at their new mines; MCP aims to boost output to 20K metric tons/year after producing ~1K metric tons in Q4 2013.

Also: REE -0.6%, AVL -2.4%, GMO -3.7%.