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Rare earth - priser, efterspørgsel og margins


44342 Aspekulant 27/7 2011 00:07
Oversigt

Lynas' priser på rare earth viste i starten af måneden at priserne på nogle af RE-grundstofferne, var begyndt at falde en smule, men deres seneste tal viser at de igen er begyndt at stige.

For ca en uge siden nævnte Seagate, der laver harddiske, at prisstigningen på sjældne jordarter presser deres margins:
"The costs of many upstream materials, especially rare earth elements...have increased significantly. These costs are expected to adversely impact gross margins by at least 200 basis points."
http://seekingalpha.com/article/281103-seagate-blames..


I fredags meldte den japanske producent af diverse motorer Nidec Corp, at de også er hårdt ramt af prisstigningerne. (De laver præcisions motorer til bla. harddiske.)

"Nidec Corp., a manufacturer of motors, said a sharp rise in the price of rare earth metals--an essential component of motors--hurt the company's financial results during the April-June period.
"As a short term measure the only thing we can do is to raise our prices," Nagamori said. "But if we raise prices at the same rate (as the increase in cost of materials), we would go out of business." He added that the company will strengthen development of products that do not contain rare earth metals and their sales."
http://www.asahi.com/english/TKY201107230324.html


I dag sendte GE et "Rare Earth Briefing paper" ud, som beskriver nogle af deres problemer med de stigende priser på RE.
"Rare Earths are also an essential component of fluorescent lighting products, and the meteoric increase in RE prices has led to a significant rise in manufacturing costs. For an idea of the scale of these rises, if rare earths were coffee, a latte-to-go that cost €1.50 just a few months ago would now cost almost €16! The situation remains volatile and further price increases seem highly likely.
... As a company for whom Rare Earths are an essential component of production, scarcity and rising prices will clearly have an impact, one that has been intensified in the EU27 countries due to energy efficient legislation driving increased use of rare-earth phosphor containing lamps.
However, it should be remembered that this isn't just a challenge for GE Lighting; it's a global issue, one that's having an impact on manufacturers and users of all kinds of goods."
https://secure.gelightnet.com/eu/resources/rare_earth..
http://www.streetinsider.com/Commodities/Rare+Earth+S..

RE Mineselskaber som Molycorp, Lynas, Great Western, Ucore og Avalon steg i dag ret kraftigt på meldingen fra GE. Siden udmeldingen fra Seagate i sidste uge er Molycorp iøvrigt steget ca 15%, og Avalon ca 10%.

Det er mit indtryk at efterspørgslen af de sjældne jordarter er støt stigende, og det er indenfor en lang række af forskellige brancher og produkter. Harddisk producenterne som er en af de største forbrugere, ser ud til at skulle bruge enorme mængder, når man ser på prognoserne for databehovet i 2020. I en rapport fra 2010 estimeres det, at mængden af data generet årligt vil stige til 35 zettabytes i 2020 fra ca 1 zettabyte i 2011.
http://www.datacenterknowledge.com/archives/2010/05/0..

Elektriske biler, vindmøller, og smartphones etc er ligeledes med til at drive efterspørgslen. Her er et link til en side, der kan hjælpe med at give et overblik over udbud og efterspørgsel af de forskellige grundstoffer, og hvilke brancher/produkter der står for efterspørgslen:
http://www.frontierrareearths.com/demand_developments..

Gareth Hatch på Technology Metals Research har skrevet en rigtig god artikel omkring Seagate og rare earths her:
http://www.techmetalsresearch.com/2011/07/seagate-rar..
I kommentarerne til artiklen kan man desuden også finde meget god information, bla fra Eamon Keane og Gareth selv.



27/7 2011 00:50 troldmanden 144343



Tak for endnu et rigtig godt indlæg.

Så nogle data den anden dag om effekten på DD vindmøller. Pt ser det godt nok ud til at det er Vestas der har valgt rigtig ved ikke at gå DD vejen. For det betyder faktisk et pænt hug i Margin med de prisstigninger vi har set.

Bruges der også rear earth i SSD HD? For jeg gætter på næsten alle computere har SSD om 24 år. Pt er det kun meget få. Men udviklingen går sindsyg hurtig på SSD udviklingen og prisfaldet



27/7 2011 01:07 HRmunk 044345



Men alligevel har blandt andet Siemens pæn succes med at sælge sine møller til eksempelvis sverige?
Hvilke penge taler vi om per mølle?



27/7 2011 01:22 troldmanden 044346



Nu er Siemens så også medejer af en mine som udvinder disse metaller og laver dem om til magneter. Men selv Siemens kan 110% sikkert mærke de store prisstigninger. Enten babere de kraftigt på deres Margin eller også stiger møllerne.

Jeg har set data der viste.... ja en meget stor stigning på kostprisen på en mølle. Men holder lige lidt på disse data endnu



27/7 2011 01:29 HRmunk 044347



Minen i Austalien? Er der ikke noget med at den først kommer i drift om et par år?



27/7 2011 01:38 troldmanden 044348



jo. Pt indkøber og forarbejder de dog deres magneter i Kina. Så de har væsentligt bedre priser end f.eks vestas som køber deres gennem grossister fra f.eks japan. Men derfor oplever de stadig den samme procentuelle stigning omend den i dollars er lavere. Men det er uden tvivl noget de kan mærke



27/7 2011 02:23 Aspekulant 144349



SSD bruger ikke RE, så du har ret i at den teknologi vil kunne reducere efterspørgslen, hvis/når den bliver billig nok. Jeg mener at have læst prisen på SSD er ca 10 gange prisen på HDD pt.
Har du nogle grafer/tal over prisudviklingen? Kunne være spændende at se hvor hurtigt prisfaldet har været de sidste par år, men jeg har ikke lige kunne støve noget op.

Enig i at Vestas traf det rigtige valg da de fravalgte DD møller. Siemens ser tilgengæld ud til at være i en bedre position til at håndtere stigningerne i pris og efterspørgsel, som du er inde på. På kort sigt pga de køber i Kina i stedet for Japan, og på lang sigt pga deres kommende JV med en producent af RE (Lynas), samt plan om produktion af permanente magneter.

Jeg vil dog tro Siemens snart melder sig til gruppen af producenter, der melder om pressede Margin pga RE priserne. Det er ikke nødvendigvis noget der slår igennem med det samme, da de sikkert stadig modtager magneter fra ordrer indgået før prisstigningerne.

Jeg vil forøvrigt tro der går minimum 2-3 år før de får succes med selv at producere magneter sammen med Lynas, da det ikke er en ukompliceret opgave.



27/7 2011 02:45 troldmanden 144350



Nej jeg har ikke set noget graf over udviklingen i prisen på SSD (har heller ikke ledt)Jeg kan blot se på engadget.com at prisen på nye hurtigere og større SSD nu er nået under $2 per gb hvor den for et års tid siden lå på ca $3. Det er stadig en signifikant meget højere pris en alm HD. Men trenden er tydelig.

Reelt set er udviklingen næsten også først begyndt da Apple smed SDD ind i macbook air. Det var et gigantisk boost til teknologien. Og jeg gætter på 2012 redisign af mackbook pro også vil have SSD som standard disk. Og så vil vi se et yderliger acceleret fald.

Så hvis det passer at HD producenterne står for den største del af forbruget så tror jeg vi om blot 2-3 år vil se deres samlede forbrug blive meget drastisk formindsket.

Vi skal ikke glemme at Vestas også bruger RE i deres nye generator generation som de netop har indført i hele 2MW platformen samt i V112 og garanteret også i V164. Så derfor bliver de også ramt af prisstigningerne. Men de bruger bare kun 1/4-1/10 RE per MW. Så derfor ER stigningerne faktisk godt for Vestas i forhold til DD konkurrenterne



27/7 2011 08:20 le 044359



interresante indlæg, du kommer med og gode links

jeg mener heller ikke at SSD bruger RE, men indtil vidrer udgør SSD en ret lille andel i forhold til HDD, men jeg tvivler på at de er 10 gange dyrere

til gengæld er SSD den storage type man bruger på tablets og for det meste i smart phones og andre steder, hvilket regnskabet for sandisk et godt eksempel på - de leverer jo storage til forskellige produkter, bl.a. cameraer baseret på flash memory



27/7 2011 08:24 le 044360



HDD shortage 11 06 25 Message List
Reply ' Delete Message #26477 of 27636 < Prev ' Next >

Hard drive supply gap estimated to widen to 15-20 million units in 3Q11

man skal nok kigge på seagate og hutchinson igen og så dem der producerer eq til
HDD

kan kun komme i tanker om een, og er ikke sikker på jeg husker rigtigt -
intevac, er det rigtigt?

23 June 2011]


Global hard drive demand in the third quarter is estimated to reach as high as
180 million units with the five major hard drive makers only capable of
supplying 160-165 million units, increasing the supply gap from a shortage of 10
million units in the second quarter, according to sources from hard drive
makers. The gap is unlikely to be filled before the end of 2011.

The strong demand in the third quarter will be mainly due to the IT product
replacement trend in the enterprise market, as well as the increasing storage
needs of cloud computing servers.

Although the supply shortage of hard drives will help maintain prices, hard
drive shipments to enterprise servers, which were originally expected to
strongly benefit makers, may face a decline. Currently, 50% of hard drive supply
is used in desktops, notebooks and netbooks, with cloud computing servers only
accounting for less than 10%. But since demand for Internet data storage is
growing, hard drive makers are turning more aggressively toward the server hard
drive market, which has higher profitability.

Currently, the top-10 notebook brand vendors have close to 80% of their models
using either 320GB or 500GB hard drives, with the proportion at 5:5. In the
third quarter, the proportion of 320GB and 500GB hard drive is expected to shift
to 4:6 with 250GB models only having a very small percentage. 640GB and 750GB
capacities will mainly be used in enterprise and gaming models and are unlikely
to grow to become the mainstream specification in 2011.






28/7 2011 17:07 turin 044458



Præcis. Solid state diske er netop kendetegnet ved at der ikke er magnetiske dele involveret. Grundlæggende er SSD jo forvokset RAM. REE bruges normalt pga deres magnetiske egenskaber.

- turin




29/7 2011 12:49 le 044465



Stec forecasts weak 3Q, stock tumbles 36 percent
Stec sees third quarter sales, net income well below views and its stock falls 36 percent


tweet0EmailPrint..Companies:STEC, Inc.Topics:Earnings.Related Quotes
Symbol Price Change
STEC 16.70 0.00


{"s" : "stec","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} On Thursday July 28, 2011, 9:27 pm EDT
SANTA ANA, Calif. (AP) -- Data storage device maker Stec Inc. on Thursday forecast third-quarter results well below what Wall Street was expecting, saying customers are seeking out cheaper alternatives to its solid-state drives.

Its shares fell 36 percent in extended trading.

In a statement, Stec CEO Manouch Moshayedi said that "market challenges" will cut into its July-September results. He said the company believes some of its OEM -- or original equipment manufacturer -- customers are switching to cheaper products instead of using its drives, in order to build more inexpensive electronics. The company said competition is also resulting in fewer orders.

For the current quarter, Stec said it expects adjusted earnings of 8 cents to 10 cents per share on $70 million to $72 million in revenue.

Analysts polled by FactSet had been expecting adjusted net income of 31 cents per share on $95.7 million in revenue.

Stec shares fell $5.96 to $10.74 in after-hours trading. The stock had finished regular trading up 20 cents at $16.70

For the April-June quarter, Stec reported it earned $9.7 million, or 18 cents per share, compared with $2.8 million, or 6 cents per share, in the year-ago quarter.

Excluding special items, the company earned 23 cents per share, a penny below than what analysts were expecting.

Revenue climbed 34 percent to $82.5 million; analysts expected $83.9 million.




27/7 2011 11:45 troldmanden 044373



Her er måske en artikel der også vil interessere dig Aspekulant.

http://www.altenergystocks.com/archives/2010/09/raree..



27/7 2011 16:49 troldmanden 044406



Aspekulant vi har tidliger drøftet HTS vindmøller. Her er en intressant artikel hvor GE sammen med AML siger de arbejder på HTS møller uden brug af RE

http://www.technologyreview.com/energy/37983/page2/

Og her er en præsentation fra AML med flere data

http://www.icmab.es/nanoselect/WindTurbineGeneratorsB..



27/7 2011 16:50 troldmanden 044407



HTS tags........



27/7 2011 23:23 Aspekulant 244419



Tak for et par gode links troldmand.

Ser ud til både GE og AML arbejder med materialer der kræver en del mere køling end de nye 2. generations HTS som YBCO, som AMSC anvender. Forskellen mellem LTS og HTS er defineret ved materialer, der er superledende under/over en temperatur på 30K. (0K = -273°C).

AML skriver på deres side de bruger MgB2 som er superledende ved 39K, og i artiklen du linkede til skriver de GE's materialer skal køles til -250°C eller 23K, hvilket vil sige GE arbejder med LTS ikke HTS - hvis altså den information i artiklen er korrekt. Det vil jeg lige ha undersøgt, for det er da meget interessant.

Ulempen ved disse materialer er at det kræver flydende helium til køling, hvorimod 2. generations materialerne som YBCO, der er superledende ved 90K, kan anvende flydende nitrogen, som gør fremstillingsprocessen både nemmere og billigere. (Man kan læse på AML's hjemmeside at de anvender flydende helium til kølingen.)

En anden producent af HTS kabler, Zenergy Power, kom med en interessant pressemeddelelse i går, hvor de skriver om interessen fra en række vindmølle producenter:

"Simon Cleaver, Chairman of Zenergy Power commented:
"I would like to congratulate the 2G team at Zenergy on their success and to thank the BMWi for their support. This certainly validates our long held belief that it is possible to manufacture 2G wire using this very low cost, ink-jet printing technique.
"In recent weeks, Zenergy has seen increased interest in its wire programme as the Chinese near monopoly of some rare earth metals has caused the cost of permanent magnets to rise dramatically. We are in touch with a number of wind generator manufacturers who are now considering 2G HTS wire solutions as a direct result of this increase in magnet prices.
"This is a major step forward. However, the Board is aware that it is news with regard to potential licensing and strategic deals that investors wish to hear about. Whilst we are certainly not yet in a position to make any conclusive statement on this matter, we can confirm that we are having meaningful discussions with several leading companies on a number of different fronts and are working hard to deliver a successful outcome. We hope to be able to elaborate on this sometime in September.""
http://www.zenergypower.com/images/press_releases/201..

De er altså I kontakt med en række vindmølle producenter, som er interesserede i deres 2.G HTS kabler, og de håber de kan komme nærmere ind på det i september.. Jeg synes det peger meget i retning af at Vestas er den mest sandsynlige, af de store vestlige producenter til at indgå i et samarbejde med Zenergy. GE ser ud til at gå i en anden retning end 2G HTS, og samarbejde med AML?, mens Siemens længe har samarbejdet med AMSC omkring HTS.

Det er jo ren spekulation, og det kunne vel også være en af de kinesiske producenter der er i spil, men da jeg læste meddelelsen var min umiddelbare tanke, at den lå lige til Vestas. Spændende om vi til september får lidt mere info fra Vestas omkring deres "hemmelige" projekt :)
Har du et kvalificeret gæt i den sammenhæng troldmand?



28/7 2011 00:10 Aspekulant 144420



Gravede lige lidt i Zenergy Power, og de indgik i 2007 en 5 årig aftale med Converteam, om at lave HTS generatorer til vind og hydro.

"Converteam Group SAS, the international developer of systems and customized solutions for
the conversion of electrical energy and Zenergy Power plc (AIM:ZEN.L), the specialist
manufacturer and developer of commercial applications for superconductive materials, are
pleased to announce that they have entered into a five-year exclusive co-operation
agreement to jointly develop, manufacture, market and sell high-temperature superconductor
('HTS') generators into the global wind and small hydropower markets. Part of this agreement,
Zenergy becomes the exclusive supplier for HTS wires and coils for all Converteam's
commercial activities in relation to wind power and small hydropower projects."

http://www.converteam.com/converteam/1/doc/News/Press..

29. marts i år købte GE så Converteam for 3,5mia$:

http://articles.latimes.com/2011/mar/29/business/la-f..

Så ser man pludselige et link fra GE til Zenergy :)



28/7 2011 00:30 troldmanden 044423



Hehe du nåede selv at finde det inden jeg fik postet mit indlæg.

Jeg tror ikke vi vil høre mere til Vestas hemmelige projekt til det er et godt stykke ude af forsknings afdelingen og de reelt set er ved at bygge en prototype. Hvis det vitterligt er så banebrydende som de lægger op til så gælder det om at holde kortene meget tæt til kroppen.

Vestas CTO har selv sagt det kan tage 5+ år inden de er i mål. Men det kan også gå hurtigere



28/7 2011 00:26 troldmanden 244422



GE har købt Converteam. Det er også derfor de nu pludselig arbejder på en 8MW HTS. Sjovt nok det som Converteam har arbejdet på. Og fra præsentationen så samarbejder Converteam med Zenergy. Så formoder da kraftigt det er GE Zenergy primært tænker på. Og mon GE overhovedet vil tillade teknologien i andre møller end deres egen?

Jeg var slet ikke klar over Siemens og AMSC havde et samarbejde om HTS. Men lidt hurtig googling ser det ud til det er rettet mod powerlines. Men det gør det et videre samarbejde indenfor vindmøller mere sandsynligt. Det eneste AMCS har sagt er at de er i dialog med flere pæroducenter og håber at kunne løfte sløret for den første licensafale i indeværende år.

Vestas har sagt deres helt store hemmelige projekt stadig er på forsknings basis og at det vil være egen udviklet teknologi. Så tror ikke de er ved at indgå licensaftaler med nogle af de nævnte selskaber.

Nu er Vestas kursen godt nok banket i gulvet. Men egentligt så så jeg gerne at Vestas blev lidt mere aggresice på teknologi siden og fortog nogle strategiske opkøb.

Her en præsentation der viser et estimat over HTS markedet frem til 2020. Vindmøller forventes at udgøre den største del af markedet i 2010.....

http://www.rusnanoforum.ru/Document.aspx/Download/29190






28/7 2011 13:51 troldmanden 044441






28/7 2011 23:00 Aspekulant 044461



Ja, man må konstatere at der bliver forsket ivrigt i teknologier, hvor man kan undgå RE. De skriver dog i artiklen at deres motor stadig ikke kan hamle op med RE motoren i Toyota's prius.

Nidec Corp som jeg var inde på i det oprindelige indlæg, poster også mange penge og forskning i at undgå RE:

"Nidec To Build R&D Center For Rare-Earth-Free Elec Motors

KYOTO (Nikkei)--Nidec Corp. (6594) said Friday that it will spend about 15 billion yen to construct an R&D center for developing next-generation electric motors that do not require rare-earth metals."

http://e.nikkei.com/e/fr/tnks/Nni20110107D07JFN04.htm



28/7 2011 21:56 Aspekulant 044460



En lille Molycorp opdatering.

De meddelte i dag at de har modificeret en kontrakt på salg af deres lanthanum, så de får en højere pris i 2011 og 2012, gældende fra 1. juli i år.

Derudover har kunden skrevet kontrakt på at aftage 75% af deres lanthanum frem til 2015, med option på at forlænge 3 år, til en markeds baseret pris.

"Molycorp's major lanthanum customer also has contracted with Molycorp for future rare earth production from Molycorp's new, state-of-the-art processing facility, which is expected to begin production at its full Phase 1 rate (19,050 metric tons of rare earth oxide equivalent per year) by the end of 2012. Under this contract, the customer will purchase over 75 percent of the lanthanum produced at the new facility under a market-based pricing mechanism. This contract extends from 2012 until 2015, with a three-year extension at the customer's option."

http://finance.yahoo.com/news/Major-Molycorp-Rare-Ear..

Lanthanum står for størstedelen af Molycorp's rare earth salg i dag, både i mængder og omsætning, så den højere pris de nu har forhandlet for 11+12, er meget positiv for bundlinjen de kommende kvartaler.

Fremadrettet vil det sandsynligvis også ligge en bund under La prisen, at én kunde nu aftager så stor en del af den kommende produktion.
De producerede samlet set 696ton RE produkter i Q1, hvor de 490t var La. Det er estimeret at de kommer op på 4500 ton for hele året.

Dahlman Rose har forøvrigt spekuleret i at kunden kunne være kemi virksomheden W.R. Grace & Co.

http://www.morningstar.co.uk/uk/markets/newsfeeditem...

Molycorp er oppe ca 7% på nyheden i dag, og er ca 25% oppe siden den seneste bund 18. juli. De kommer med 2Q regnskab den 11. august.



1/8 2011 14:59 Nippon1976 244532



her en super spændende og godt gennemarbejdet artikel om emnet:
Nearly a year has passed since Molycorp hit the stock markets with its IPO. And considering this stock's popularity today, it's astounding that this IPO had flown under the radar for most investors. Last July MCP shares debuted below the pre-IPO targeted price range, and traded on the low side of that range for weeks before it finally caught a bid. MCP didn't quite have the fanfare as say LinkedIn or other IPOs over the last year.

Though the rare-earth sector was getting some play in commodities circles, with the mainstream media even providing a bit of coverage, investors weren't all that familiar with the strategic importance of Molycorp's end product. Most investors didn't think twice about its unique niche, and by its name they presumed MCP was just another base-metals miner.

But boy how quickly things have changed with some light now shined into Molycorp's corner. Over the past year more and more investors have been educated on the significance of what is contained in MCP's booty, and this understanding has translated into some serious gains in the rare-earth-stock sector. I doubt even LinkedIn will be able to boast a 400%+ gain after only 10 months of trading like Molycorp!

So what is so special about Molycorp's product? Molycorp produces rare-earth elements (REEs), and these minerals are special thanks to their growing importance in high-tech manufacturing. REEs are indispensable in gadgets ranging from iPads to laser-guided missile systems. They are also essential in the growing "green technology" movement, with usage in such things as hybrid vehicles and wind turbines.

As an investor, knowing REEs as "tech metals" will get you by. But if one truly wishes to be successful in leveraging the newly-illuminated bull market in these exotic commodities, a deeper understanding of REEs is imperative. And this understanding is as unassuming as knowing what a rare-earth element actually is.

In scouring the markets for REE stocks I've seen many investors mistakenly buy or waste time researching companies that they thought were REE-centric, but actually weren't. Countless folks have been fooled by the "rare" tag, mistakenly thinking a company's "rare-metal" deposit is a "rare-earth" deposit. Now I can see how this may be confusing since rare-earths can in fact be referred to as rare-metals. But interestingly a rare-metal is not necessarily a rare-earth. Confused yet?

Various mining companies tag their lithium, beryllium, niobium, tantalum, and even platinum-group-metals deposits as rare-metals deposits. While this isn't necessarily incorrect, none of these are actually rare-earths. Rare-earth elements (often referred to as rare-earth minerals) hold a specific place in the periodic table of elements, something most of us are familiar with from our high-school chemistry days.

Specifically this REE group is comprised of the entire lanthanide series (atomic numbers 57 through 71), along with two other elements that were added to the mix based on their similar chemical properties. Most folks have probably never heard of the individual REEs. In fact, if they were shown the list they'd probably think they were fabricated names from comic books (neodymium, promethium, europium, ytterbium).

Most folks would also be amused to find that rare-earths are not actually rare. Provocatively many REEs are as common as the base metals. According to the U.S. Geological Survey, even the least-abundant REEs are nearly 200x more common than gold! "Rare" comes into play in these elements' geological concentrations. Oddly enough, it is quite difficult to find a deposit with a high-enough concentration of REEs that is economically feasible to mine.

This rarity is one reason why Molycorp's Mountain Pass deposit has been getting so much attention. Mountain Pass is one of only a handful of REE deposits in the world that has proven economics. And this deposit is even more special because it is one of the only sources of reliable REEs outside of China.

For many years China has essentially been the world's only source of REEs. This transpired as a result of its ability to completely price out the competition in the small rare-earths market. The low-cost and unregulated production from China's large deposits had forced the closures of nearly all non-China REE mines in recent decades. As a result, China is now responsible for over 95% of the world's REE supply.

Interestingly China's global rare-earth monopoly hadn't presented too much of a problem on the consumption front. There were plenty of REEs to go around, with the demand appetites of high-tech countries like Japan, the US, and others well-satiated. But this happy balance has recently come to a grinding halt, and folks are now clamoring to figure out where they will get their next dose of REEs.

Over the last several years a perfect storm of fast-growing demand and China supply cuts has sent shock waves through the once-reliable REE market. On the demand front, this modern age of technology has quickly made REEs quite-relevant commodities. To put this in perspective, consider that global demand has grown from about 1k metric tons per year in the 1950s to about 135k metric tons in 2010.

And this demand growth doesn't look like it will let up anytime soon. I've seen estimates that annual REE demand will rocket by another 50%+ by 2015 (to around 200k metric tons), and then to 250k metric tons by 2020. This huge increase in demand puts a lot of pressure on the sole source of REE supply. Unfortunately, China doesn't have the production bandwidth to meet these needs.

But China's infrastructure and capacity limitations are only part of the problem consumers are faced with today. The biggest problem is China itself, as this mineral-rich country has recently decided to place a stranglehold on the rare-earths market by slashing exports. And we're not talking a modest pullback here. In 2010 China dropped its annual REE export quota by a staggering 37%. It then announced an additional 35% haircut in the first tranche of its H1 2011 export quota.

So why did China do this? Well, it depends on who you ask. If you ask China, it'll tell you one of the big reasons for these export cuts is to preserve its own natural resources, which allows it to stockpile for its own consumption. And this seems reasonable since China's internal demand growth is actually rising at a faster clip than the rest of the world's.

China also claims it wants to get its arms around the environmental damage REE mining has caused, while in unison cracking down on illegal mining. And indeed some of its mines have laid waste to their surroundings. Even its "permitted" mines are notorious for poor environmental management, which is of course one of the big reasons why it was able to produce its REEs cheaper than the rest of the world.

Though I'd like to believe China cares for its environmental welfare as much as it claims, most folks are able to read between the lines. There may be some smidgen of truth to its official REE-export-reduction rhetoric, but let's be honest. China recognizes the growing strategic importance of REEs, and also understands that it's going to take years for other countries to develop enough REE mines to remove dependence on its hoard. So why not take advantage of the situation by strong-arming the rest of the world?

China's massive reduction in exports has produced two main effects that have certainly been to its benefit. First, REE prices have gone through the roof. In February 2011 China REE exports had fetched north of $100k per metric ton, an all-time record and a 600%+ price increase over just 7 months. And prices are still going higher today!

The second effect is that China now has a major strategic advantage over its high-tech competitors. The consumers that have relied on China's REEs for new-tech manufacturing and R&D are in dire straits. Not only are they forced to pay the going rate for REEs since most have no substitutes, many are finding reduced inflow and/or an outright cutoff. These consumers must either throttle back their production or build their factories/products in China.

Overall China has effectively usurped control of all facets of the REE market. And regardless of the reasons, not much can be done about it. Unfortunately many non-China REE consumers are dead in the water. All they can do is snatch up China's export scraps, and anxiously await supply from newly-developed REE mines elsewhere in the world.

The first of these newly-developed mines will come from the likes of Molycorp and Australian miner Lynas Corporation. But while the REEs from their operations will provide much-needed relief, they will only partially fill the widening supply deficit. And because the cat is already out of the bag on these mines, the investor in me is particularly interested in the next generation of mines that will follow.

Fortunately higher prices always entice new players onto the scene, players that will take on the task of developing these next-generation REE mines. And with a whole slew of miners that have recently added REE projects to their portfolios, stock investors now have a lot of choices.

Unfortunately the REE supply that some of these emerging miners will deliver can't get to the markets soon enough. Developing any mining operation takes a lot of time and capital. And due to their complexity, REE mines tend to fall on the right side of the time/cost bell curve. Not only is it harder to find economically-feasible deposits, even at today's prices, it is much more difficult to process the ore. It is going to be a long and hard journey getting these next-gen mines online.

REEs are a fickle group by geological standards. Interestingly one big hurdle that must be overcome is an REE deposit's inherently-radioactive nature. All REE deposits contain some level of thorium and/or uranium. And since many have higher-than-desired levels of these contaminants, they require extra permitting from a national nuclear regulatory agency for disposal, storage, and transportation. This extra step is of course time-consuming and expensive.

Rare-earth deposits also tend to have very complex metallurgy. REEs are found in different rock types, with each deposit housing a unique composition of the individual elements. And it is quite difficult to crack a deposit's metallurgical code to where the processing recoveries are high enough so there is minimal loss of the individual elements. Once a workable concentrate is produced, then comes the arduous task of actually separating it into individual oxides. Finally the REE oxides must be refined into alloys that consumers can actually use.

Unfortunately there aren't many metallurgical facilities outside of China that are capable of doing this complex separation and refining. Therefore many of the miners are forced to build their own facilities, which requires significant capital. Considering these challenges, most newly-discovered REE deposits won't see the bottom side of a shovel. The miners either won't be able to figure out the metallurgy, or they won't be willing to commit the capital it takes to develop a vertically-integrated operation.

Another factor vexing the miners is saturation. Provocatively even though the REE market is desperate for more supply, there's only so much room for it. Demand is indeed skyrocketing, but the raw volume required to meet this demand isn't all that much.

Unlike larger mining sectors where volume from new mines hardly makes a dent in the economic balance, any volume from new REE mines will be material in closing the gap. In actuality it will only take a handful of new REE mines coming online to catch up with demand.

And it is this reality that is absolutely essential for investors to understand if they seek to successfully leverage this REE bull market. Even though there are hundreds of companies around the world entering the race to develop the next generation of REE mines, only the first handful to cross the finish line will thrive.

It's also important to realize that outside of Mountain Pass and a couple of other mines that will achieve commercial production in the near term, these next-generation mines are still 5+ years out. Investors must exhibit keen foresight in choosing the companies that possess the right combination of quality and timely projects.

At Zeal we were interested in which mining companies are capable of developing these next-gen mines. And this compelled us to embark on a mission to uncover the best of the best. In our latest round of expert research we examined the universe of stocks that hold REE projects in the US and Canada, and whittled them down to our favorite half-dozen that are profiled in our newest report.

Surprisingly you won't find Molycorp in this report. Even though MCP is a great company with a bright future that has opened investors' eyes to the potential that exists in this small commodities sector, it doesn't fit the bill of next-gen mines. What does fit the bill are some elite juniors that will likely round out the non-China REE infrastructure build-out that MCP got started.

In this report you'll learn that not all REE deposits are created equal. You'll also learn that a deposit like Mountain Pass doesn't come close to possessing the full gamut of individual REEs that various high-tech manufacturers require.

As mentioned REE deposits vary greatly in their individual element weightings. And interestingly Mountain Pass's resources have a greater than 99.5% weighting in what is called the light rare-earths (LREEs) category. These light elements (by atomic weight) are more common, and are thus less expensive. The real sweet spot of REE deposits are those that contain a higher concentration of the rarer and more expensive heavies (HREEs).

Though Mountain Pass's lights are still in high demand, there continues to be a huge void in HREEs available to the market. This means those next-gen mines that hold higher concentrations of heavies will have off-take customers lining up at their doors. And we don't overlook this fact in our report, with several of our favorites rich in HREE resources. Buy your report today to learn about some high-potential next-gen REE-mining companies that should deliver both LREEs and HREEs to market.

This brand-new REE stocks report along with our other recent reports that focus on gold and silver stocks will serve to build our shopping list for when the markets favor capital deployment. And these deployment decisions are made in our acclaimed weekly and monthly subscription newsletters. Subscribe today, we have a stellar track record with all 583 of our stock trades in the last decade or so averaging annualized realized gains of +52%. You won't be disappointed!

The bottom line is with fast-growing demand and major disruptions in the supply chain, REEs have quickly become hot commodities. And the alarming economic imbalance that has emerged has caused prices to skyrocket. These higher prices, strong future demand-growth prospects, and the desperate need for non-China REE mines has brought REE-mining companies out of the woodwork that are now in a fast-and-furious race to bring new supply online.

Even though the next-generation REE mines are still well out on the horizon considering the complexities that go into mine development, some well-executed research should bring investors to those mining companies that are best-positioned to capitalize on this REE bull.

Scott Wright June 3, 2011



2/8 2011 14:52 Aspekulant 044582



Jeg har tidligere nævnt at jeg tror der vil komme en opdeling af de enkelte eller grupper af RE, ifm kvoterne. Måske endda helt forbud af eksport af enkelte af de tunge RE. Her er en artikel fra det kinesiske WSJ, der peger i samme retning:

China may strengthen the export control of rare earth

"According to informed sources, the Chinese government is also considering light and heavy rare earth separation of the establishment of export quotas. Submitted to the regulatory authorities to discuss the latest draft proposal, 75 percent of export quotas should be allocated to the lanthanum and cerium, 25% allocated to the remaining 15 rare earth minerals."

http://translate.google.dk/translate?hl=da&sl=zh-CN&t..



2/8 2011 20:02 Nippon1976 044592



Den falder 8% i dag.... Av av



3/8 2011 01:22 Aspekulant 044603



Ja, den er ikke for sarte sjæle :)
Den svinger rigtig meget, både op og ned.

Lidt nyt fra Kina, denne gang omkring produktions kvoter:
http://en.21cbh.com/HTML/2011-8-2/3MMjM1XzIxMDY3Mg.html



3/8 2011 08:05 Nippon1976 044605



kører du med volatilitetsstop så?



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