Molycorp (MCP) Lower; WTO to Probe China Over Rare Earth Quotas
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Traders will be watching Molycorp (NYSE: MCP), Avalon Rare Metals (AMEX: AVL), Tasman Metals (AMEX: TAS), Rare Element Resources (AMEX: REE), and others on new World Trade Organization (WTO) news regarding China exports of rare earth minerals.
The WTO is expected to begin a probe of curbs put on rare earth mineral production. exportation by China in July 2010. The move reduced domestic production and export quotas by 40 percent, causing prices for minerals such as tungsten and molybdenum to shoot over 530 percent higher in 2011, with a 10 percent increase in prices through the first five months of 2012.
Spurring the investigation were complaints filed by the U.S., European Union, and Japan.
China has argued in the past the lack of regulation in the industry has led to a dwindling of resources and a negative environmental impact. Currently, China produces 90 percent of the world's rare earth supply.
Once the WTO puts together a panel to investigate, the agency has six months to issue a report.
Molycorp is trading lower early Monday.
The WTO is expected to begin a probe of curbs put on rare earth mineral production. exportation by China in July 2010. The move reduced domestic production and export quotas by 40 percent, causing prices for minerals such as tungsten and molybdenum to shoot over 530 percent higher in 2011, with a 10 percent increase in prices through the first five months of 2012.
Spurring the investigation were complaints filed by the U.S., European Union, and Japan.
China has argued in the past the lack of regulation in the industry has led to a dwindling of resources and a negative environmental impact. Currently, China produces 90 percent of the world's rare earth supply.
Once the WTO puts together a panel to investigate, the agency has six months to issue a report.
Molycorp is trading lower early Monday.
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