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Wednesday, March 30, 2011

Rare Earths (REE) (MCP) (GMO) (AVL) Down on Large China Discovery

Rare earths companies outside of China, like Rare Element Res Ltd (AMEX:REE), Molycorp, Inc (NYSE:MCP), General Moly (AMEX:GMO) and Avalon Rare Metals (AMEX:AVL) are all trading down today on news of a huge rare earths discovery in China, which could end up boosting supply while pushing down prices.

Of particular not was a huge deposit of Scandium, one of 17 rare earths, and which is used in the building of a variety of high-tech products. Estimates are there are over 70 tons of scandium in the deposit.

Also part of the discovery was 130,000 tons of lead and zinc, 3,000 tons of cadmium, and 800 tons of silver. In addition, there were significant deposits of rhenium, stannum and gallium found.

This actually boosted share of Market Vectors Rare Earth/Strategic Metals ETF (NYSE:REMX), as well as Chinese rare earths companies like China Shen Zhou Mining & Resources, Inc. (AMEX:SHZ) and Qiao Xing Universal Resources (Nasdaq:XING).

3 comments:

Anonymous said...

could result in massive sell off of US stocks and boost shares of Chinese rare earths companies. So buy more Chinese stocks.

Anonymous said...

This is a scam, there is no such discovery. Effective April 1, China will impose a heavier tax on rare-earth minerals. And this will cut down export of rare metals from China.

Anonymous said...

Scandium isn't used in defense metals. It's used in golf clubs mainly because of its rebound properties. None of the heat controlling magnet elements are listed here. In any case, this is an example of the bogus manipulation of markets an ideological mercantilist government will continue to engage in; pulling price strings to leverage power play objectives elsewhere.