Quotas have been trimmed slightly so hopefully this helps with...

Quotas have been trimmed slightly so hopefully this helps with upwards momentum. A few excerpts, “China has set its first rare earths mining quota for 2024 at 135,000 metric tons, the country's Ministry of Industry and Information Technology said on Tuesday, 12.5 per cent higher than a year earlier…However, the rise is smaller than the 19 per cent year-on-year increase seen in the first quota released in 2023.”

Quite interesting that they have released the first quota earlier this year, as well as the additional quota set at the end of last year. “Four Chinese analysts told Reuters that the release of the first quota came earlier than expected this year, especially in the week before the Chinese New Year holiday, starting from Feb. 10. Beijing last year issued the first quota in late March…Allocations are typically issued twice a year, although there were three last year for the first time since the system was introduced in 2006.”

It is curious to what the strategic planning of China behind their rare earths are. One can only guess. From the articles itself wrt the impact on the d industry itself, “Rare earth prices have likely bottomed out and are poised to rise later this year on demand from electric vehicles (EVs) and wind power and as China is expected to pull back on expanding output quotas, analysts said.” “If the annual growth rate for the quota is below 13 per cent, the market will shift to a shortage from a glut," said one of the analysts, requesting anonymity as he is not authorised to speak to media.”

Will be interesting to eye developments here although it appears the large increases of quota should come to an end. It is even postulated from Chinese sources that the prices of REE are near their cost price basis as well - so this will be hurting their profits significantly as their own REE companies back home have taken a nose dive as well. As mentioned in previous posts there’s geopolitical implications and considerations behind the govt moves - I don’t think they will sustain such prices; I believe this would have been done to cement their monopoly and stymie western investment in REE developments, reduce costs for REE as they consume a large portion and have an ever growing EV car industry which they want to dominate and is their plan for future power projection - high REE prices work counter to that at these early stages. And they see REE a critical resource such as the US.

A lot of bleeding for us as of late although the big picture and narrative is there for REE. All eyes on DRE to prove up other resources until the markets catch up on REE and sentiment changes.