6 Reasons Why Demand And Prices Of Rare Earths Will Remain Strong
March 21st 2011 18:33
At the end of January Adam Hewison posted about Rare Earths (REE) and specifically Molycorp (MCP) as a way for investors to participate in the business. You can read his post here.
I post today about REE because I read an article from Robin Bromby, Editor, REE World Report. Seems the stocks suffered when Japan was hit by the quake and the tsunami. Bromby lists six reasons why demand and prices of REE will remain strong:
Reason #1: Japan is China’s single largest customer for REE. You might have expected prices to fall for REE, but no evidence of declines.
Reason #2: The talk is that Japanese reconstruction will siphon money away from REE, but some of that money will be spent on technology.
Reason #3: There are many items involving REE where demand is not contingent on strong economic growth, and wind turbines is one.
Reason #4: The military demand will remain strong.
Reason #5: The reports that China may start importing REE because its own production cannot satisfy domestic demand. Does that remind you of what's happened in Silver?
Reason #6: You and me, and people like us. We want the latest tech toy.
I took a look at that Adam Hewison recommendation of Molycorp and it looks like it may have put in a bottom. It pulled back about 61.8%, rallied and is currently testing the support again. Possible upside if the support holds is $76! See Chart.
I post today about REE because I read an article from Robin Bromby, Editor, REE World Report. Seems the stocks suffered when Japan was hit by the quake and the tsunami. Bromby lists six reasons why demand and prices of REE will remain strong:
Reason #1: Japan is China’s single largest customer for REE. You might have expected prices to fall for REE, but no evidence of declines.
Reason #2: The talk is that Japanese reconstruction will siphon money away from REE, but some of that money will be spent on technology.
Reason #3: There are many items involving REE where demand is not contingent on strong economic growth, and wind turbines is one.
Reason #4: The military demand will remain strong.
Reason #5: The reports that China may start importing REE because its own production cannot satisfy domestic demand. Does that remind you of what's happened in Silver?
Reason #6: You and me, and people like us. We want the latest tech toy.
I took a look at that Adam Hewison recommendation of Molycorp and it looks like it may have put in a bottom. It pulled back about 61.8%, rallied and is currently testing the support again. Possible upside if the support holds is $76! See Chart.
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