Rare Earths MMI Stands Pat as Commodities Can’t Find Support

The Rare Earths MMI held steady with its September number, 18, as the bearish commodities environment continued to keep prices of the magnetic and specialty metals low.

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The index has trended in its low range for more than a year, now, as substitution and outright low demand have plagued the once high-flying trace elements used by cell phone producers and in military and industrial uses.

New Extraction Processes

Domestic producer Texas Rare Earth Resources Corp. was recently awarded a Broad Agency Announcement (BAA) research contract by the US Defense Logistics Agency’s Strategic Materials Division.

The Defense Logistics Agency is the Department of Defense’s largest logistics combat support agency, providing worldwide logistics support in both peacetime and wartime to the military services as well as several civilian agencies and foreign countries.

TRE recently successfully completed the first phase of a new separation process development, using the K-Technologies, Inc. (K-Tech) Continuous Ion Chromatography (CIC) methodology. The process allows TRE to remove light rare earth elements, lanthanum and cerium, from a leach solution in a straightforward, low-cost manner. The resultant aqueous product stream can be processed to make a commercially marketable mid/heavy rare earth mixed concentrate.

The Light and the Heavy of It

The heavy rare earths are the ones that are most desirable for end users and can’t be readily substituted. The light rare earths have become so unprofitable that domestic producer Molycorp, Inc., operating under bankruptcy protection, ended production at its Mountain Pass, Calif., light rare earths mine in late August. It will now only source the heavier minerals from its operations in China and Estonia.

This is certainly an interesting product development, but it won’t impact rare earths prices for some time, if at all. As we have said before, the rare earths market has been oversupplied ever since China removed export quotas on its producers, the bulk of the industry, and it’s difficult to predict a price turnaround without major shutdowns overseas or a shift in the muted demand picture.

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Until there is significant change in the market it’s difficult to predict much change, at all, in rare earths prices. They are holding at an all-time low but the upside isn’t thrilling, either, having charted below 30 on the MMI since June 2014. Without a significant change in the market, perhaps curtailed Chinese supply, it’s difficult to recommend rare earths investment.

Rare Earths Prices

The price of yttrium increased to $37.74 per kilogram from $37.60 in September, an increase of .3%. Neodymium increased. The price of terbium oxide closed the month at $369.59 per kilogram, dropping 5.6% from $391.68 the previous month.

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