Molycorp (MCP), Rare Element (REE) Higher on WTO China Export Ruling
Up)
Rare earth stocks are moving higher Tuesday morning following a World Trade Organization (WTO) ruling on Monday.
The WTO said China's limits on exports of minerals like coke, magnesium, and others artificially inflated prices and gave domestic Chinese firms an unfair competitive advantage.
Reuters noted the ruling didn't include rare earth elements specifically, but many hope China will scrap export limits on those minerals as well. By lifting bans, many are hoping for lower prices and higher volumes for the minerals.
But lower prices aren't guaranteed. Lifting of export bans doesn't necessarily mean production quotas will be increased. China aims to keep damage from mining of rare earths limited while prices remain high, leading to better profits for firms.
On the environment, the WTO has said China was unable to demonstrate that its restrictions helped to conserve resources, cut pollution, or improve public health. As for whether China will cooperate with the WTO demands, many expect them to in order to remain in good standing with the organization.
Amid the news, many rare earth stocks are higher:
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The WTO said China's limits on exports of minerals like coke, magnesium, and others artificially inflated prices and gave domestic Chinese firms an unfair competitive advantage.
Reuters noted the ruling didn't include rare earth elements specifically, but many hope China will scrap export limits on those minerals as well. By lifting bans, many are hoping for lower prices and higher volumes for the minerals.
But lower prices aren't guaranteed. Lifting of export bans doesn't necessarily mean production quotas will be increased. China aims to keep damage from mining of rare earths limited while prices remain high, leading to better profits for firms.
On the environment, the WTO has said China was unable to demonstrate that its restrictions helped to conserve resources, cut pollution, or improve public health. As for whether China will cooperate with the WTO demands, many expect them to in order to remain in good standing with the organization.
Amid the news, many rare earth stocks are higher:
- Molycorp (NYSE: MCP) is up 5.8 percent;
- Avalon Rare Metals (AMEX: AVL) 5.6 percent better;
- Rare Element Resources (AMEX: REE) up 7 percent; and
- China Shen Zhou Mining & Resources, Inc. (AMEX: SHZ) is up about 4.5 percent.
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