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http://proedgewire.com/rare-earth-intel/china-to-stockpile-h… ... Jack Lifton on October 18, 2012 at 5:13 AM said: Hongpo, Have rare earth price drops within China been sustained over a long enough period of time to have directly affected the recent earnings of the company’s you name? If so then those companies either have a very large profit margin or make their money from other things. How else to explain that they are still in profit at all even after such large drops in selling prices. I was told that Ziangxi stated that “after the reorganization of the REE industry in their sector is completed” their, Ziangxi’s cost of processing per kilogram will be around 25. If this is true then Ziangxi has a very long way to go before it can lose money on REE prices. In fact even if their cost is USD$25/kg rather than 25 reniminbi/kg they would still make money on neodymium and on the heavier rare earths. No matter which currency the 25 stated above turns out to be the costs of producing rare earths in China will be less than producing them outside of China. I have a difficult time understanding why American investors simply accept bald statements from REE juniors about low cost production when we are given no data to back them up. I think if we had a normalized set of costs of goods sold and we knew exactly which of the underlying costs were distributed we would then we could rank the REE producers and juniors honestly and brutally as to their probability of success in the real world where the lowest cost, lowest priced producer of a commodity is the survivor. The Chinese domestic market is currently undergoing such a “shakeout” and contrary to some of the commentary this will result in lower cost more competitive producers. I suspect that after the Chinese shakeout now underway that Chinese politicians will lift the protective veil of quotas and allow the large profitable survivors to export just enough to keep them profitable in the case of the light rare earths. I also suspect that Chinese demand and the limitations of its domestic supply will require the production of heavy rare earths outside of China. The winners will be the lowest cost, lowest selling price, producers of the products that the markets demand. There is room in the non Chinese market for one major LREE supplier to the Japan, one to the USA, and one to Europe. The is concomitantly room for several HREE suppliers to China, and to each of the minor markets (relative to China) just named. I don’t know if Molycorp will survive it’s increasingly complex and changing business model, and I don’t know if Lynas will overcome the political problem I has in Malaysia. I think it is foolish for investors to overlook Rare Element Resources and even Frontier as LREE players. Each Has an advantage of lower break even than the other large potential LREE suppliers. For HREEs I am betting on Ucore in the USA, Tasman in Europe, and I am watching Tantalus, in Madagascar, and the two Australians, Hastings and Northern Minerals. But even when I add to this group those producing HREEs as byproducts, such as Alkane, Orbite Aluminae, and AMR (private) I do not get enough production of the HREEs to allow even a doubling of the world’s production by 2020. I must therefore predict a decoupling of LREE and HREE prices. Investors need to do the math. ... |
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| aus der Diskussion: | >>> Ucore hebt ab <<< |
| Autor (Datum des Eintrages): | Langstrumpf2 (19.10.12 10:44:28) |
| Beitrag: | 1,030 von 2,726 (ID:43729997) |
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