Time to get out the REE Sector !!!!!!!!!!!!
Rare earth price could fall after Japan quake-exec
Japanese demand has paused after quake
* Prices still likely to remain high over next few years
* China could become net importer of rare earths
By
ScottMalone
PITTSBURGH, March 15 (Reuters) - The aftermath of Japan's disastrousearthquake and tsunami could temporarily ease the rise in rare earth prices, butoverall demand is likely to continue to outstrip supply for the next few years,an industry executive said.
Western companies are scrambling to redevelop mines capable of producing the17 rare earth elements, used in everything from Apple iPads to wind turbines,after China last year began sharply reducing its exports of thematerials.
Business in parts of Japan is at a standstill as authorities cope withaftermath of the quake and people worry about the release of radiation fromnuclear reactors at the quake-affected Fukushima Daiichi power station.
That has meant a pause in demand for rare earths at one of the world'slargest users, the Asian Metal International Rare Earth Summit in Pittsburghheard on Tuesday.
"We cannot call our customers right now and say, 'Do you want to buysomething?' No one is in the mood ... So if 50 percent of the consumption of theworld is in Japan and this 50 percent stops for a couple of weeks, or a coupleof months, this will be a huge impact on the consumption side or the demandsite," said Furkhat Faizulla, marketing manager from Advanced Material JapanCorp. "We will have to see the real situation in Japan in one week, two weeks,but maybe the prices will come down in the coming months."
Overall, prices are likely to remain elevated for the next few years ascompanies including Molycorp Inc (
MCP.N), Lynas Corp Ltd(
LYC.AX), Great WesternMinerals Group (
GWG.V) and Avalon RareMetals (
AVL.TO) work toredevelop mines in the United States, Africa and Asia that were idled at timeswhen rare earth prices were lower.
"You can't just flip a switch to bring a mine online. It takes seven to 10years on average ... supply is going to be tight for a lot of these rare earthelements in the near term," said Gary Billingsley, executive chairman of GreatWestern.
CHINA SHIFT?
Executives at the conference also wrestled with the question of whetherChina, which accounts for more than 95 percent of global rare earth production,but is estimated to hold just a third to half of the world's reserves, wouldeventually shift to become a net importer of rare earths.
Growing Chinese demand could have that country importing more rare earth thanit expects at some point "beyond 2015," Great Western's Billingsley said.[ID:nN15128756]
That was a similar to a projection made by Molycorp Chief Executive MarkSmith last week.
Pierre Neatby, vice president of sales and marketing at Canada's Avalon, saidChina is more likely to turn to importing heavy rare earths, used in magnets,than the lighter varieties, used in glass.