Roar Earths

Rare earth metal miners were roaring this morning with many of the Market Vectors Rare Earth ETF component holdings up double-digit percentage points. On my daily volume breakout screen, 5 of the top 16 volume breakouts were in rare earth/strategic metals miners, including: China GengSheng Minerals Inc (CHGS), Avalon Rare Metals Inc (AVL), General Moly Inc (GMO), Rare Element Resources Ltd (REE), and REMX (the Market Vectors Rare Earth ETF itself). Those are just a few of the top volume breakouts across the U.S. markets. Here’s a list of holdings within the REMX ETF as per Bloomberg and their performance today:

Shares of many rare earth and strategic metals flew on Monday and Tuesday this week based on an announced rare earth mineral export quota cut from China, the largest producer of rare earth metals in the world. So what are the implications should the largest producer in the world restrict supply? Prices go up. It’s the same idea behind the oil cartels. Control the supply of a resource with inelastic demand and you have the setup to make substantial profits.“China’s Commerce Ministry allotted 14,446 tonnes of quotas to 31 companies, which was 11.4 percent less than the 16,304 tonnes it allocated to 22 companies in the first batch of 2010 quotas a year ago.” (more)