When you think of where your iPods, cell phones, computers and electronic motors come from, consider this: the three to five-fold jump in Chinese rare earth prices threaten to send those gadget prices up astronomically quicker than you thought possible.
Heck, if it gets really bad, electronics would disappear from the shelves, and products that depend on these materials would see prices skyrocket – possibly bankrupting the very companies that depend on these sales.
So how do you play it?
You buy the hell out of rare earth stocks, like the Greenland play we’ve reported on, or Molycorp, Rare Earth Elements, you name it.
It’s so bad, according to The Financial Times that “industrial buyers are in shock after witnessing the price of rare earths such as cerium oxide jumping 475 per cent in just five months, amid falling supplies.”
Fortunately, prices for light rare earths, which include cerium could see downward pricing pressures, as compared to heavy rare earths. That’s because when Molycorp’s mine is up and running, we’ll have a significant source of light rare earths.
Given this and other light rare earth streams likely to come online shortly, additional supply will send light rare earth prices down.
However, heavy rare earth prices are likely to surge even higher. But this could improve, too, which is why I recently conducted an interview with a small, up and coming rare earth company that’s looking to drill for heavy rare earths just miles from Molycorp’s mines…
And if all pans out the way we think it will, this small 30-cent company could explode.
I’ll have more information on the company, the interview, and its prospects in next Thursday’s Wealth Daily. Stay tuned.
