Big Bank UBS Joins Palisade in a Very Optimistic Outlook for Rare Earth Materials
Adem Tumerkan July 31, 2018
Category: Research “Sell in May and go away.”
An old and very well-known trading adage that holdsespecially true for the cyclical mining markets.
Traders usually sell their stocks in May to avoid the flat summer months.
Being on the merchant banking side of things – we can attest that capital does seem to dry up.
But being on the investment side – it’s also the best time to find deals. . .
The rare earth supply crunch is something we’ve touted since November 2017. But the mainstream is finally starting to realize it.
Just last week, UBS released their own bullish report on rare earths elements (REEs) – specificallyneodymium and praseodymium(NdPr).
UBS is the largest Swiss banking institution in the world, and they arrived at a similar thesis to ours – the undeniable rise of permanent batteries and their role in electric motors. . .
This narrative’s further emphasized by the huge growth of wind turbines – which also use NdPr magnets. . .
As of today – China produces over 85% of the World’s rare earths.
They control nearly the entireworld’s supply – and with trade wars looming between the U.S and China, this is a huge advantage for them.
This gives China a vital hold over a world that’s rotating from fossil fuels to cleaner energy sources.
If they decide to ban rare earth exports – or simply decrease them – this will create huge problems abroad. . .
The only other major sources of ‘rare earth oxides’ (REO), is from the Australian- based producer, Lynas Corporation, Ltd., and the Mountain Pass mine – which’s located in California – and needs to be re-started.
Therefore – due to the political risks of China, and the minimal production outside of it, UBS predicts a supply deficit for NdPr beginning in 2021.
MNB Price at posting:
0.3¢ Sentiment: Buy Disclosure: Held
