China Embargo News Casts a Cloud Over Rare Earth Stocks
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With the launch of the first sector ETF, it was supposed to be a great day for the red hot rare earth stocks - however it was anything but.
The trade in the sector, which has been supported by China's move to embargo exports of rare earth minerals, received a major setback after the New York Times reported that the Chinese government abruptly ended this embargo on Thursday.
Investors, betting that China's embargo would lifts prices for these specialty materials, were delivered a major setback on the news.
Molycorp (NYSE: MCP), which is up 226% in the last three months, saw its stock fall 15% today. Rare Element Resources Ltd. (AMEX: REE), up 240% in the last three months, is down 14%.
Both of these stocks are included in the new rare ETF Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX), which debuted today. The new ETF, which opened at $20.50 per share, slipped to $19.58 on the China embargo news.
The trade in the sector, which has been supported by China's move to embargo exports of rare earth minerals, received a major setback after the New York Times reported that the Chinese government abruptly ended this embargo on Thursday.
Investors, betting that China's embargo would lifts prices for these specialty materials, were delivered a major setback on the news.
Molycorp (NYSE: MCP), which is up 226% in the last three months, saw its stock fall 15% today. Rare Element Resources Ltd. (AMEX: REE), up 240% in the last three months, is down 14%.
Both of these stocks are included in the new rare ETF Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX), which debuted today. The new ETF, which opened at $20.50 per share, slipped to $19.58 on the China embargo news.
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