Well my statement a few days ago about the trade talks
...I think it is at least the sewing of seeds for something much bigger.
Sure came into fruition today.
All REE companies are considerably up on the ASX. Especially GGG which more than doubled most of them. But thats understandable given GGGs development status at this point in its history and it is awaiting breaking feasibility news to which we have been given snippets of how good it will be.
The thing that interests me is China Northern Rare Earth shot up 100% today.The Chinese then must clearly see their Presidents visit to JL Mag Rare Earth REE facility yesterday as a stern retort/threat to the USA. Especially as he took his top trade negotiator. As what else is he going there for?
Now Im getting a little excited about this for a few solid reasons. Ill offer them in point.
-First the Chinese are NOTORIOUS for the most insane swings in listed company prices. Investing there is like trying to claw money while not getting trampled by a charging herd. So try factor in such demand rushing madness
.-Then China also dont like being bullied. They have a viral hit song circulating right now about China standing up against the US. Its their "Trade War Song" Its actually pretty funny to watch.https://www.bloomberg.com/news/articles/2019-05-20/trade-war-fight-song-shows-growing-anti-u-s-sentiment-in-chinaYou can see the Chinese are pretty angry and ready to fight lol
-Now President Xi heads a culture that "saves face". With this sort of public sentiment stirring he needs to show some force.
-China cant compete in a trade war with the US. They dont import as much from the US as the US does from China. So China NEEDS a bigger stick from somewhere. REEs is one of three main ways to do this and the other two arent really going to do that much.
-This is why China I think is flexing its strength….and its learly going now for the REE stick!
-The market knows about REEs. It still remember the Sept 8th 2010 the Senkaku Boat collision which spurred the REE restrictions to Japan which incurred a spike in REE prices from 1000 to 4000%...yep... I got those zeros right. Take a look at what happened before yourself...
It also remembers the recent Lithium boom (well off its boil with companies now under half its peak in most cases). Ths money may well be searching for a few years for a new home.
-The Shanghi Index isnt exactly at its highs. They have been holding back due to the trade tensions. Investors look well cashed up. Especially the mining industry (same world wide) which is still far off its boom time highs. Rare Earth and Lithium is always talk on investor tongues. People are expecting a boom to start "one day soon “This could be a trigger for that boom to begin.
-If Xi keeps pushing the REE card and the Chinese investers keep diving for REES (prices up 2.8% today). Of which prices have been very low for many years
-OR if Xi actually does constrain REE exports to the US and continues the Mongolian HRE import ban. Then this could very easily produce another REE boom even stronger than the one with Japan .Its something to watch!
Remember GGG hit $1.30 last time this situation happened 9 years ago. So given the extreme advancements GGG has made in 8-9 years AND whats currently due to come into fruition AND a now has Chinese partner to give the Chinese investers solid comfort to invest beside. I can now see why a) GGG outstripped all other ASX REE increases by far today and b) this never ending flow of buyers we are seeing spilling through the door (Chinese?) will push GGG well beyond this price and I cant see why not well beyond in value. Especially given the feasibility study and new declared status by the CEO of GGG now being. “One of the lowest cost, highest-margin,undeveloped rare earth projects globally.” Then possibly GGG would look very set to fire well beyond the former equivilant high of $1.30 in share value too. (without a ML approval)
Ive never been behind China much before. But now Im sure hoping they pick up the REE stick here because if this all keeps up...even if China doesnt actually use it (but just keeps dropping hints to the potential that it will). Then this sector could well go crazy and GGG.... in particular ...will hammer straight through that roof as it is the perfect storm... inside... the perfect storm.
Good luck everyone and just hang on to your hat!
GGG Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
(20min delay)