Monday, April 25, 2011

Titanium Metals (TIE) (CNAM) (GMO) (REE) Close Mixed as Rare Earths Remain Tight

Rare earths miners have been jumping since the announcement by China it's going to cut back on exports in a major way. Some of them have been pulling back after the recent surge, as companies Titanium Metals (NYSE:TIE), China Armco Metals, Inc. (NASDAQ:CNAM), General Moly (AMEX:GMO) and Rare Element Resources Ltd (AMEX:REE) closed mixed Thursday.

The majority believe that rare earth supply will remain constrained for at least five years, even with the media hype of all the projects coming on line. Those proposed projects will take years to go through the process before production is ready to start.

Molycorp CEO, Mark Smith recently said that there will probably be two coming on stream within that five-year period. During that same time rare earths demand is estimated to double annually.

That means those companies that already have operations going should enjoy solid pricing power during that season.

As to the ignorant proposal by big-government politicians concerning the Rare Earth Supply-Chain Technology and Resources Transformation Act, the last thing we need is for the government to use yet another so-called crisis or "national security" issue to expand government in a useless manner as is now being attempted.

The markets should and will sort it out, as it has already began to do.

Rare Element Resources Ltd closed at $13.66, down $0.39, or 2.78 percent. General Moly closed at $5.24, falling $0.03, or 0.57 percent. China Armco Metals, Inc. ended the session at $2.32, gaining $0.24, or 11.53 percent. Titanium Metals closed the day at $18.75, rising $0.51, or 2.80 percent.

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