LYC (& ALK) to leap on China's 7% export quota cut...

[Sparty]

It seems that many have misunderstood the ramifications of China's announcement re the new export quota for 2011 2H... In a nutshell by including for the first time ferrous alloys (dysprosium ferro alloy, terbium ferroalloy etc.) which contain more than 10% rare earths in the quota the yearly allowance is around 28,200t down from the 2010 allowance of 30,260t.

This 7% reduction in the face of increasing demand combined with the recent reduction in LYC's share price points to a buying opportunity as LYC will be the first new non-China based supplier.


One well respected broker has LYC as a buy with a price target of $2.60 predicated on a REE basket price of US$30/Kg until 2015 when competing supply will come on-stream.



As today's REE basket price is ~ US$225 per kg there seems to be plenty of upside to that particular forecast...


As Alkane will also soon be in production it may be worthwhile to grab a few sooner than later.


Short term, 0 - 5 years, Criticality Matrix for Green Technology Substrates (US Department of Energy 2010)





(I hold LYC, ALK, GGG and KRB)

[Sparty]

Rare Earth exports reduced