How to Trade Binary Options General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest…Read More
How to Trade Binary Options General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest…
The most recent report on the U.S. oil market offers a mix of data, providing ammunition for both oil bulls and bears alike. One can find whatever they want in the data. Looking for signs that the oil market is moving towards balance? There’s a strong inventory decline for you. Worried that the market is still woefully oversupplied? Yep, there is also data to back up that conclusion – another week of strong production increases. Casual market watchers can be forgiven for being confused by the varying perspectives on the same data release.…
The on-going diplomatic feud in the Persian Gulf pitting Qatar against a coalition of Arab states led by Saudi Arabia has already disrupted regional affairs to a significant extent: economic blockades, rejected airspace and closed embassies are just a few features of this sudden, somewhat unexpected rift between Doha and the rest of the Gulf. Triggered by a hack of Qatar’s state website (a cybercrime which investigations have confirmed originated in the United Arab Emirates) that portrayed the country’s ruler as supporting the Islamic…
Bitcoins do not magically appear out of nowhere. Each one is “mined” in a blockchain process that eats enough electricity to power an American household for 1.57 days. This process is what gives the coins their value. The work involved in the creation of the smart contracts gives cryptocurrencies the authority to be used to buy items – a privilege ordinarily left to governments and treasuries. If bitcoins are the currency of the future, its miners must consume electricity that does not overthrow the global carbon budget. This…
Kuwait ordered the expulsion of the Iranian ambassador and 14 other diplomats for alleged links to a “spy and terror” cell, Iranian and Kuwaiti media reported on Thursday, worsening an unusual public dispute between the two countries. Kuwait also told Iran’s cultural and military missions to shut down, following a court case that increased tensions between the Gulf Arab state and Tehran. Iran responded to the expulsions by filing a complaint with the Kuwaiti charge d’affaires, the Iranian news agency ISNA said. ISNA also said Kuwait is allowing only four of 19 embassy staff to remain in the country. Some sources said those expelled were given 45 days to leave the country; others said 48 days. The expulsions were an […]
We doubt that many have heard of it, or know what it’s used for, but the price of Praseodymium-Neodymium (sold in oxide form) has been on a tear, up 43% ytd.
Neodymium and Praseodymium, collectively known as NdPr, are two of the family of seventeen rare earth elements (REEs). The price of several other REEs, like Terbium – Ticker SHRATBOX (really) and also used in very powerful permanent magnets – have been rising too (up 36% ytd).
Unfortunately for the rest of the world, especially the US, China has a monopoly on the rare earths market with 85-90% of global production.
REEs are strategically important due to their (small but critical) applications in products used for the defense and technology sectors – including today’s mainstay of human existence, the mobile phone. China’s dominance arose from undercutting almost every other mining and processing player in the decades prior to its WTO entry.
The current story behind the higher prices is that China is getting serious (again) about the environmental impact of REE mining, and is making renewed efforts to curb significant levels of illegal production. On Monday, managing director of Australian-based rare earth producer, Lynas Corp (who just happened to note how her company is “highly leveraged to any increase in price for NdPr”) commented.
“Demand has always been strong, growth for the magnetic materials will increase as there is greater adoption, particularly for electric vehicles…(and) wind turbines. The second thing, however is that the Chinese central government has been very active over the last six months in ensuring that a lot of what had been announced recently, has actually been enforced on the ground…they have inspected a lot of plants to ensure that they have proper documentation for their raw materials and that has helped to eliminate illegal supply.”
The environmental impact in China is certainly horrendous (see BBC report, “The dystopian lake filled by the world’s tech lust” here). Sometimes described as “hell on earth” or “the worst place on earth”, this is one view of the Baotou toxic lake, 20 minutes from Inner Mongolia’s largest city with 2.5 million inhabitants.
Obviously, the most important issue these days is what does it all mean for equity prices? Higher rare earth prices are beginning to have an impact. This is the chart for the industry behemoth, China Northern Rare Earth Group.
Closer to home, the price of the VanEck Rare Earth/Strategic Metals ETF has also been moving higher, even though some of holdings are plays on non-REE strategic metals, like moly and titanium.
With a market cap of $62m and small/mid cap constituents, things could get interesting if REE prices enter a sustained bull phase.
Adding insult to injury for its strategic interests, the last remaining rare earth mine in the United States, Mountain Pass in California, has recently been sold to a consortium including Shenghe Resources Holding, which has alleged ties to the Chinese Government.
Two days ago, Michael Silver, CEO of advanced materials manufacturer, American Elements Corp., met with Trump’s chief strategist, Steve Bannon, and Chief of Staff, Reince Priebus, at the White House. In “This CEO Wants Trump to Nationalize the Only Rare-Earth Mine in America”, Bloomberg reported.
“The mine should be converted to a national laboratory ‘dedicated to rebuilding America’s rare-earth mining industry so the world knows it is safe to build high-tech manufacturing plants in the U.S.,’ Silver said…he’s proposing the U.S. government apply the Takings Clause of the 5th Amendment and acquire Mountain Pass by eminent domain.”
If anybody’s thinking that surging rare earth prices, China/US tensions and soul-searching about how the US could have let China dominate the global supply of such critical materials, sounds familiar… they’d be correct. It feels a bit like 2010 when there was a sudden mania followed by a collapse in rare earth stock prices. Below is the Lynas Corp chart during 2010-12.
In the end, China backed down on substantial cuts to export quotas, which it had justified on environmental grounds. In part, this was due to WTO intervention at the behest of western countries led by the US.
The NdPr price peaked in Summer 2011 and never really recovered (chart below). Some analysts speculated whether the resolution of the rare earths dispute, peak in the gold price and the beginning of the ramp in Chinese gold imports through Hong Kong were linked. There was no evidence to support the assertion.
This time around, we have no idea whether the situation in rare earths will come close to the fun that was had in 2011, however, we remain mindful of the quote attributed to Deng Xiaoping that: “There is oil in the Middle East, but there is rare earth in China.”
Authored by Dmitri Speck via Acting-Man.com,
Readers are surely aware of the saying “sell in May and go away”. It is one of the best-known and oldest stock market truisms.
And the saying is justified. In my article “Sell in…
Just last week we noted that the one entity that could ‘out-Amazon’ Amazon – the US government – was beginning to ask if Bezos’ company was too big? Tonight we got our first glimpse as the FTC sent a shot across the world’s 2nd richest man’s bow, probing allegations of illegal discounting.
Reuters reports, that as part of its review of Amazon’s agreement to buy Whole Foods, the Federal Trade Commission is looking into allegations that Amazon misleads customers about its pricing discounts, according to a source close to the probe.
The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which looked at some 1,000 products on Amazon’s website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them.
An analysis found that in 61 percent of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6.
Following receipt of the letter, the agency made informal inquiries about the allegations, according to a source who spoke on background to preserve business relationships.
The FTC declined comment for this story. It was not known if the agency would open a formal probe into the allegations.
Amazon said in a statement that Consumer Watchdog’s study was “deeply flawed.”
The initial reaction was to sell…
How long before this dip is bought?
Well that didn’t take long!!??
More than half of Americans, 55 percent, would support an increase in the federal gas tax—which has not seen an increase since 1993—to help fix infrastructure in their own states, according to a Bloomberg National Poll. The federal per-gallon tax of 18.4 cents on gas and a 24.4-cent tax on diesel were last increased in 1993, meaning the purchasing power of the tax has significantly increased. A narrow majority of Americans are now supporting a levy rise, with 51 percent of Republicans polled and 67 percent of Democrats surveyed…
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Via Global Macro Monitor,
No, we are not talking about President Reagan’s supply-side economics – policies to increase productivity with the goal of increasing long-term aggregate supply or output while simultaneously reducing inflation.
We now …
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