Wednesday, November 04, 2009

REE: Chinese rare earth expert calls for immediate stockpiling TNR.v, CZX.v,, RES.v, QUC.v, BYDDY, NSANY, TTM, TM, F, DAI, BMW, RNO, RIMM, GOOG

"Rare Earth Elements (REEs) are a group of specialty metals with unique physical, chemical and light-emitting properties that are seeing dramatic increases in demand, owing to their technological applications. The unique properties of REEs make them critical materials to many emerging technologies which are becoming increasingly commonplace in today’s society. While global consumption has been steadily increasing, supply of REEs has tightened dramatically. For the last 10 years, China has dominated global supply, but owing to the importance of REE availability to internal industries, China is prioritizing its domestic markets through steadily increasing export taxes on REEs in tandem with reducing export quotas. As a result, REEs are in short supply, and with demand forecast to progressively increase, the world drastically needs new suppliers of REEs."

"Real story in market movers was again in REE. Avalon Rare metals is on fire today with Rare Elements Resources RES.v advancing 15-20% - money is coming back into the sector after recent consolidation phase. Today's news from TNR Gold is another positive development for this global Lithium and REE play."
Yesterday's move in Rare Earth Elements plays could be also contributed to the article below: Chinese are very serious in their ambitions with Green Mobility and there is only one step from stockpiling to export restrictions - this is why REE become strategic commodities for the future.

November 2, 2009 - China should use its reserves of foreign currency to buy rare earths for stockpiling in a bid to protect strategic resources, said a senior Chinese researcher on rare earths.
“I hope the Chinese government can invest about $ 1 billion to buy rare earths and thorium for stockpiling as China presently has sufficient reserves of foreign currencies and market prices for rare earths are comparatively low at this moment,” said Mr. Xu Guangxian, professor at Peking University in an interview with the China Economy Times.
“We must set up a stockpiling system for rare earths and thorium and support leading domestic producers like Baogang, Minmetals and Jiangxi Copper to implement the stockpiling,” Mr. Xu, also an academician at the Chinese Academy of Sciences said. He is regarded as the "Father of Rare Earths" in the industry in China.
China produces over 95% of the world's rare earth supply. However, there has been much criticism in China that the country's rare earths have been overproduced and undersold in the last decade.
“Japan and South Korea have built up stockpiles which are enough for 20 years of consumption by taking advantage of low market prices before 2008 when China began to restrict production but China hasn’t set up a stockpiling system yet,” Xu criticized.
“We must take action soon to protect rare earth reserves otherwise they could be exhausted in only ten years in some major producing regions,’ Xu warned. “There were around 1.5 million tonnes of industrial reserves of medium and heavy rare earths in southern China but now only 600,000 tonnes is there after years of overexploitation.”
Besides production restrictions and a stockpiling system, Mr. Xualso called for industry integration to prevent waste of resources.
“China has around 70-80 producers for rare earth separation butt here is only one in Europe. Most of them are very small and harmful because they cause unfair trade by undercutting each other when market prices fluctuate. So we must support major producers like Baogang, Minmetals and Jiangxi Copper to lead the integration,” Xu said.
Posted by Stew Cowans at 02:18 PM in RareMetalMedia "
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