After exploding through the $100,000-per-ton level for the first time in February, prices for rare earths metals are poised to keep rising as Chinese producers move to meet stricter environmental regulations by an Aug. 1 deadline. China, which controls 95% of the export market for the 17 elements used in tablets, laptops, hybrid cars and military devices, is also the world's largest polluter and has been looking to reduce some of that pollution by imposing tighter standards on rare earths producers.
News of more price increases is a positive for the Rare Earths Stocks Index, which is up fractionally today. The Index has jumped 40% in the past month and about 13% in the past week.
Chinese mining companies that don't submit applications or fail to pass inspections could be subject to harsh punishment, including delays in having new projects approved or having their IPOs pushed back, according to China Daily. An unidentified industry executive said at least 60% of the country's rare earths producers could not currently meet the new standards, China Daily reported.
A JPMorgan report released on Monday said rare earths prices continue to soar as China cracks down on illegal miners. In February, rare earths exports rose to $109,036 per ton.
Most rare earths names are up on the news, but Molycorp (NYSE: MCP - News), the largest U.S.-based rare earths miner, and Rare Element Resources (AMEX: REE - News) are both down about 1%. Lynas Corporation (Pink Sheets: LYSCF - News) is up 1% and Market Vectors Rare Earth/Strategic Metals ETF(NYSE: REMX - News), the rare earths ETF, is flat, while Neo Material Technol (Pink Sheets: NEMFF -News) is leading the Index with a 4% pop.
No comments:
Post a Comment