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Sharp Rise In REE Prices In Response To Chinese Threats

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Text Box: 1REEs stored at Tradium in Frankfurt, Germany
As a result of the most recent escalation in the U.S.– Chinese trade war, prices for several Rare Earth Elements (REEs) have risen between 10% and 20% within a week.

China’s threat to stop exporting the crucial ingredients in everything high tech prompted fear among industrial producers ranging from electric motor and actuator producers, electric vehicle manufacturers, consumer electronics companies and lighting producers. Investors, too, are entering the scene hoping for short term profits.

Among the metals most affected, Neodymium was number one with an increase of over 20% since the beginning of the month. The metal is most commonly used in electric motors, used not only in electric vehicles but also in a very wide range of electric actuators in car power windows, seats, sunroofs and so on. Praseodymium, Dysprosium and Terbium, all used in related applications, were next with gains of over 10% each.

The next couple of weeks will show if the trend is sustainable, but both sides to the U.S. / China dispute are increasingly entrenched in their positions, with no compromise in sight.

Technology metals, such as Gallium which is used in most semiconductors used in electronic products, are likely to follow suit. While China’s dominance is not quite as pronounced as with REEs, about 90% of which are from China, the share of Chinese production is large enough to make world markets shake.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.