Dropping rare earth prices in China and supply chain impact

The Wall Street Journal (July 6, 2011) reports that rare earth metal prices in China dropped by as much as 7.2 %, a remarkable change from a short few months when China’s cut in exports created worries of global shortages for inputs to alternate energy products.  With new production sources, such as the Malaysian facility operated by Lynas, expected to come online, and the WTO ruling against China’s curbing of exports, potential easing of supply may account for this drop. But there are environmental concerns about the radioactive waste generated by the Malaysian plant, which might dampen supply.  What does the price drop of rare earth metals tell us about supply issues ? Should plans to stockpile rare earth metals by countries and businesses react to price fluctuations ? Should US regulations be eased to permit new US mining of rare earths to resume ?

About aviyer2010

Professor
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