Rare Earths Sector Posts Huge Gains

Source: Australian, Robin Bromby  (6/12/11)

"Dysprosium, which was worth $410/kg. in February, is now at $1,500/kg."

Australian, Robin Bromby

If the futures are on the money, it looks as if we will have to sweat it out today with no local trading and just watching from the sidelines as first Asia, then Europe and finally Wall Street have another bad day.

But amid all the gloom, there are some bullish sectors.

Recent developments in the rare earth elements (REE) sector have been nothing short of amazing.

One Japanese magnet maker said last week that it would revise its prices monthly rather than twice a year because REE prices were rising so rapidly.

One U.S. sector expert says some Chinese magnet makers are offering quotes that expire after only 72 hours, though specifying the final price will be set on delivery. And you can see why.

Dysprosium was worth $410/kg. in February, $460/kg. in March, $900/kg. in April and about $1,500/kg. now.

Terbium, which was $900/kg. in April, is now $3,000/kg.

Should you buy rare earths stocks? Well, we put this to an industry elder yesterday and his answer was—yes and no.

Yes, it's a sector in which the successful companies will do well, but many hopefuls will fall by the wayside.

He believes some elements, particularly cerium and lanthanum (both have had huge price rises), will fall in price when the Mount Weld mine in Western Australia and the revived Mountain Pass mine in California come into operation next year.

There are so many rare earth exploration projects around the world being fast-tracked, so it's a case of the quick and the dead because these metals have very small markets. The 2015 estimate for global dysprosium demand is only 2,500 tons.
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