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

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%.

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Comments (6)
  • SivBum
    , contributor
    Comments (2767) | Send Message
    The Chinese may not be holding back shipments for foreign users but they are free to raise prices. And if I were apple or dell, I would second source US miners at the very least to counter geo-political risks. Anyone recall the epoxy problems in the early 90s that shut down DRAM productions?
    26 Mar 2014, 03:47 PM Reply Like
  • Yorick
    , contributor
    Comments (789) | Send Message
    Mining in a word for investors - disastrous...don't care if you are digging gold, silver, coal, uranium, steel, copper or supermanium...it all is bad these days without the hyperadrenaline charged growth of China.
    26 Mar 2014, 03:49 PM Reply Like
  • Skaterdude
    , contributor
    Comments (1831) | Send Message
    It's not the hyperadrenaline growth of China that drives RE consumption. RE is used more in products produced for export. Maybe you're comingling it with iron ore and copper? More global consumer and industrial demand for things that require REs would drive this market. I'm wondering how long it will take for any actual change related to this decision. How long will China wait to implement anything? And they will still have to deal with shutting down illegal mining and smuggling ... the WTO doesn't affect that stuff.
    26 Mar 2014, 04:39 PM Reply Like
  • rsills
    , contributor
    Comment (1) | Send Message
    Have any analysts considered a more sophisticated dynamic between supply and demand? For example that more supply may actually give end users and consumers the confidence to ramp up production and in turn increase demand. The end users that I have spoken to have stated they will spend less time on R&D engineering REOs out of their process if there was more supply.
    26 Mar 2014, 08:24 PM Reply Like
  • jsv922
    , contributor
    Comments (18) | Send Message
    Jack Lifton, who appears to be the guru of all things Rare Earth, sees bankruptcy for Lynas--which would be a shame, seeing how the company, after bogus stall tactics by environmentalists that cost 2 years, finally got a top notch operation underway. Anyone have any thoughts on that?
    26 Mar 2014, 09:39 PM Reply Like
  • bd4uandu
    , contributor
    Comments (2074) | Send Message
    Media release http://bit.ly/1l5Cb3L
    26 Mar 2014, 09:45 PM Reply Like
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