Rare Earth Day 3.0

The Rare Earths continue to rock today in a down market as the story unfolds.  Germany announced yesterday the rare earth supply shortage is starting to hit their industrial base.  The Chinese canceled a three-way high level meeting with Japan and South Korea due to tensions over China’s export restrictions.  The Rare Earth stocks will trade similar to commodities until production is up and running and will continue to move on news of potential shortages and geopolitical positioning.  Their market caps are relatively small so just a small allocation to the sector could (and already has) really move the stocks.

This is going to become a major international issue, in our opinion, and could cause  great damage to China’s diplomatic relations and reputation if not managed well. Stay tuned!

Related Stories
China axes talk with Japan, S.Korea over rare earth – Agence France-Presse
Rare Earth Shortages Hit Germany – WSJ
China gets tough over rare earth minerals – ABC
Rare earth minerals shortage feared by US and EU – BBC
Germany warns of China grip on rare earths market – Bloomberg

This entry was posted in Black Swan Watch, BRICs, China, Commodities, Geopolitical, Gold, Rare Earth Elements and tagged , , , . Bookmark the permalink.

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