Rare Earth ElementsHere is an excerpt from the September 7,2010 RCR (Resource Capital Research, Sydney, NSW, Australia. You can buy the full review for A$110.It is entitled "September Quarter RCR Rare and Minor Metals Company Review".
"Resource Capital Research
Rare and Minor Metals Company Review . Disclaimer and disclosure attached. Copyright© 2010 by Resource Capital Research Pty Ltd. All rights reserved.
Market update: Rare Earth Elements
Investment Comment
Industry forecasts are for 20-30% compound annual growth in prices to
2014. Given China?s almost complete dominance of the REE market,
there is a significant opportunity for new producers to take advantage of booming prices and demand while ensuring security of supply to non-
Chinese buyers. Rare earth projects, due to their chemical complexity,
can take a long time to develop, so only advanced or geochemically
simple projects will be able to come online in the next 5 years.
Pricing
Recovery from the GFC, combined with China?s decision to cut the REO
quota, has driven some prices to 10-year highs. This includes the LREE
which are more common and less valuable the HREE. For example, the
biggest gain has been cerium (Ce) over 12 months, up 860%. These
prices will only be sustainable to the extent they are driven by demand,
and could vary according to China?s export and production policies.
Changes in reported REO prices over 3 and 12 months
Rare Earth Oxide
Current price
US$/kg June 7, 2010 September 7, 2009 3mth % change 12mth % change
Lanthanum 37.0 8.0 5.7 363 555
Cerium 36.0 6.1 3.8 490 860
Praseodymium 55.8 30.3 14.0 84 298
Neodymium 48.8 30.8 14.3 59 242
Samarium 33.3 4.5 4.5 639 639
Europium 595.0 515.0 485.0 16 23
Gadolinium 40.0 7.7 6.3 423 540
Dysprosium 288.0 190.0 109.3 52 164
Terbium 595.0 505.0 350.0 18 70Yttrium 34.5 11.5 13.3 200 160
Heavy Rare Earths
USD FOB ex-China per kilogram' 99% purity; price are bid-offer mid points.
Source: Metal Pages, RCR
Market: Supply and Demand
The USGS estimates that world REO production in both 2008 and 2009
was 124kt, of which 120kt (96.8%) came from China. It also estimates
that China has 36% of the total global REO economic reserves of 99mt,
followed by the CIS (19%) and USA (13%).
The main importer of REE metals and compounds in 2008 was Japan,
with a combined 34.3kt, while China exported 55kt (BGS). It is clear
that the majority of rare earths are both mined and consumed in China.
BCC Research forecasts 7-9% compound annual growth rate in global
REE demand over 5 years from 2009, which equates to a +60kt increase
in demand, against a supply increase of +40kt.
Looking forward to 2014, actual consumption is forecast to be 180kt
TREO (total rare earth oxides). However, more than this will need to be
produced, as the mined REO ratios do not match the spectrum of
demand. Accordingly, it is forecast that supply will have to be in the
range of 200-210kt REO. This latter is termed the “Adjusted Global
Demand” in the graph below. Recently (August 2010) the China Society
of Rare Earths forecast global REO demand would reach 210kt in 2015."
Cheers,
Doug.