Molycorp (MCP) (SHZ) (AVL) (REE) (XING) Close Down on Tough Trading Day

Rare earths miners have been soaring since the announcement by China it's going to cut back on exports significantly. but that wasn't the case Tuesday, as the major rare earths miners pulled back with China Shen Zhou Mining & Resources, Inc. (AMEX:SHZ), Avalon Rare Metals (AMEX:AVL), Rare Element Resources Ltd (AMEX:REE), Qiao Xing Universal Resources, (Nasdaq:XING) and Molycorp, Inc (NYSE:MCP) closing down on the day.

Most think that the rare earth supply will remain tight 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 begin.

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

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

But it appears it'll be a somewhat volatile rare earths ride until there's much clearer economic clarity for the sector. It appears bullish long term at this time.

Market Vectors Rare Earth/Strategic Metals ETF (NYSE:REMX) closed down on Tuesday as well, closing at $27.80, falling $0.20, or 0.71 percent.

Molycorp (MCP) (XING) (REMX) (OSN) 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 Qiao Xing Universal Resources, (Nasdaq:XING), Molycorp, Inc (NYSE:MCP), Market Vectors Rare Earth/Strategic Metals ETF (NYSE:REMX) and Ossen Innovation Co., Ltd. (NYSE:OSN) 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.

Ossen Innovation Co., Ltd. closed at $3.38, gaining $0.06, or 1.81 percent. Market Vectors Rare Earth/Strategic Metals ETF closed at $27.75, up $0.16, or 0.58 percent. Molycorp, Inc. ended the session at $68.24, falling $3.23, or 4.52 percent. Qiao Xing Universal Resources closed the day at $2.05, rising $0.02, or 0.99 percent.

Avalon (AVL) (GMO) (REMX) (OSN) Close Up on Rare Earths Demand

Rare earths miners have been moving up quickly since the announcement by China it's going to cut back on exports significantly. Some have been pulling back after the recent surge, although companies and ETFs like General Moly (AMEX:GMO), Avalon Rare Metals (AMEX:AVL), Market Vectors Rare Earth/Strategic Metals ETF (NYSE:REMX) and Ossen Innovation Co., Ltd. (NYSE:OSN) closed up Wednesday.

Expectations are rare earth supply will remain tight for at least five years, even with the media hype of all the projects coming on line. Those will take years to go through the process before production begins.

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

That means those companies that already have operations online should enjoy significant pricing power during that time.

As to the foolish 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 be used to expand government in a useless manner as is being attempted.

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

General Moly closed Wednesday at $5.27, gaining $0.18, or 3.54 percent. Avalon Rare Metals closed at $8.88, up $0.09, or 1.02 percent. Market Vectors Rare Earth/Strategic Metals ETF ended the day at $27.59, jumping $0.48, or 1.77 percent. Ossen Innovation Co., Ltd. closed at $3.32, rising $0.09, or 2.79 percent.

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).

Molycorp (MCP) Leads Rare Earths (REE) (AVL) Higher

After JPMorgan (NYSE:JPM) raised its price target on rare earths giant Molycorp (NYSE:MCP) today, shares of the company jumped, helping to boost the overall rare earths sector.

Avalon Rare Metals (AMEX:AVL), Lynas Corporation (LYSCF), Neo Material Technol (NEMFF) and Rare Element Resources (AMEX:REE) are all up on the day.

The catalyst for the increase in the price target of Molycorp by JPMorgan was the recent boost in domestic rare earth prices in China.

The giant bank maintains their "Overweight" rating on Molycorp, while raising its price target from $66 to $74. They see the prices as being sustainable for a period of time.

Rare earths ETF Market Vectors Rare Earth/Strategic Metals (NYSE:REMX) was also trading up today.

Molycorp was trading at $59.68, gaining $4.17, or 7.51 percent, as of 2:17 PM EDT. Market Vectors Rare Earth/Strategic Metals was at $25.12, up $0.49, or 1.99 percent. Avalon was at $7.83, up $0.60, or 8.30 percent. Rare Element Resources rose to $13.38, gaining $1.19, or 9.76 percent.