Rare Earth Day 4.0

Rare earth stocks rocked today on the back of an article in PC magazinem which is really old news. Molycorp (MCP) was up almost 10 percent, hitting a high of $50.29 a share, and Rare Earth Elements (REE) up almost 20 percent. Molycorp has doubled since we first posted our views on Rare Earth Elements (REEs) in September,

Scarce commodities, which have no substitutes and critical for industry and national security? Sounds like “Gold on Steroids” to us. We wouldn’t bet the ranch, but don’t want to miss what could be a nice run as the market begins to focus. This is a long-term story and experts say that rebuilding an independent U.S. supply chain could take 15 years. The Defense Department is about to release a study on the national security aspects of the U.S. REE dependence on China.

After China cut-off rare REE exports to Japan in a diplomatic dispute, we suspected a “Sputnik Moment” and panic among end users as China controls more 90 percent of the world’s production. These are very volatile stocks and we have existed our position looking to reload at lower prices. Also, check out the very informative charts below from the Department of Energy.