Back to what matters..........., page-3

Don't you understand the very basics?

Price appreciation from Nov '16 has clearly been driven by supply constraint.

Despite REO supply sitting around 70% process capacity the Dragon has bumped primary supply by 40% uplift mining quotas.

There is no evidence whatsoever on the demand side to warrant that China domestic, quite to the contrary anecdotally there is a stalemate ATM between sellers & buyers, which has resulted recent softening in prices.

Where is your "red-hot" demand China?

Why has NdPr fallen 375 to 325 YTD?

This quota looks well outside market dynamics and far more likely a political move attempting to bring "illegals" into the resource tax net, and perhaps some sort of control.

To me it reads a blatant admission by the State that it cannot eradicate "illegals" by policing them, therefore expand the quota to include them and attempt control by taxing them. No coincidence the uplift coincides with the generally accepted 30/40% level of "illegals".

If that is the case, and "illegals" (in bulk form is basically over production by the consolidated entities, 40ktpa is NOT produced in local villages) are contained within the production quota 147ktpa that will perhaps not add greatly to existing supply but may raise underlying prices by the respective percentage of resource tax due to be enforced July.

Should that play out, perhaps a ~10% uplift in LRE values, regardless demand, thinking/typing, that might also bring the demand currently met by "illegals" out of the shadows. Fascinating, but will take some time for this development to be understood.