Stocks of rare earth miners surged during morning trade on Wednesday after Chinese state-linked media said that Beijing may weaponize the exports of the vital materials amid an escalating trade war with the US.
Hong Kong-listed shares of China Rare Earth Holdings Ltd skyrocketed around 40 percent after the opening bell before slightly falling back later in the day. At the same time JL Mag Rare-Earth Co, the plant Chinese President Xi Jinping visited last week, jumped more than 10 percent. The miner's stock has been rising for several consecutive trading sessions and hit a record high on Wednesday.
Other rare earth-related companies also enjoyed gains, with China Northern Rare Earth Group High-Tech Co. soaring around 9 percent Xiamen Tungsten Co. climbing nearly 5 percent.
Also on rt.com China's other nuclear option in trade war with US – Rare earth materialsNot only Chinese miners enjoyed gains on Wednesday, as shares of Australian rare earths producer Lynas reached a historic peak after they gained more than 15 percent in one day. Australia is one of the top global rare-earths producing countries, with annual output of 20,000 tons, but it is far behind Chinese yearly production of 120,000 tons.
The rally comes shortly after Chinese government-funded media, such as the Global Times and People’s Daily, reported that China may use the elements to hit back against US pressure. On Tuesday, Global Times editor in chief said that Beijing is “seriously considering” an embargo on rare earths. Beijing has not officially commented on the issue so far.
Rare earth elements, also called rare earth metals, is the group of 17 elements with special characteristics such as dysprosium, praseodymium, lanthanum. The materials are actually not rare, despite their name, but they are difficult to find in the desirable concentrations and they are difficult to process as the ores often contain naturally occurring radioactive materials such as uranium and thorium. Still, the materials are vital for a wide range of industries, especially high tech.
China's reserves account for roughly 30 percent of the world's total, and the country dominates global supply chain as it produces more than 80 percent of them. Today there is hardly any alternative source that can fulfil the market demand.
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Source : RT Business News
Embargo on? Rare earth stocks soar after China warns of possible US export ban
Embargo on? Rare earth stocks soar after China warns of possible US export ban
