RE: how is that possible?Another important point to make. In reality there is no quota for Dysprosium and Terbium today.
The reason is that these markets are less than 1500 tons of a REE market of 120.000 tons. Most of that market is "cheap" Lanthanum and Cerium.
The quota system is currently not for individual metals like X nr of kg's Dysprosium or X nr of kg's Lanthanum instead it is X kg's of REE metal....
The result is that you can export as much expensive Tb and Dy as you want but that few producers want to use their precious limited quota for bulk Lanthanum or Cerium. That causes the price of Tb and Dy to be about the same in the domestic markets as the international markets. No quota effect and no WTO risk, only lack of Dy & Tb everywhere.
Since the Chinese producers consider it a waste to use their quota for Lanthanum and Cerium they do not export it enough so their is a huge glut in the domestic market and a huge deficit in the international market. Prices of Lanthanum and Cerium, the main REE are therefore 5-10x higher outside of China causing the talk about manipulated prices of REE.
It has been speculated that the Chinese would change this quota system as soon as Lynas and Molycorp start huge production of Lanthanum and Cerium (especially Molycorp is a Cerium and Lanthanum company and has almost no interesting REE's except Neodymium). If the quotas would be changed according to this, that would mean that quotas are actually introduced for the first time for Tb and Dy (and that would be allowed for environmental reasons under WTO as you could see in the beginning of the recent CNBC analyst discussion posted earlier).
The logical result would be no more manipulation of Lanthanum and Cerium and they would crash hard together with Molycorp. The flip side is sharply higher internationaly prices (and a sharp difference to domestic like the one we see today in Ce & La) in Terbium and Dysprosium.
But Tb and Dy doesn´t really need a quota effect, prices will be much higher before significant production capacity comes online 2014 or later anyway.
A final point, whenever you think of "REE" you most likely think about these small special metals that are key to electronics, electric cars and green stuff. You do not think about Cerium and Lanthanum for the oil industry or watertreatment. The only bulk REE of interest is neodymium.
People that understand this most likely has a much better chance to make money in this sector. It is very missleading to talk about "REEs" as a group. It is even quite missleading to talk about heavies and light REEs as the two different groups. Some has introduced the concept of the interesting five or something like that and that is much more correct.