So we would have all heard the news by now...tariffs being temporarily lowered.
This was always expected.
And yet the RE investors drop their bundles and run to the hills.
Why?
This has been a great outcome for all RE projects.
Do you really think the west is going to stop diversifying their RE supply chains?
Do you not think that all the western RE customers are wary of China now supplying them RE?
An example......If you are in the board room of a large multinational corporation, and your board says, "what is the risk of us being cut off from China for our NdPr, and what is the extra cost to be supplied from a western source?" And the answer is....we don't know what will happen in the future....and there is a small premium for ex-china supply...which in the scheme of our total costs is tiny....but not having supply would disrupt our entire products production.....
Ummmmm the answer has just become apprant to all the boards on all these companies. Have a look at the MP Materials latest report...where it said it had fielded tons of enquires from concerned companies....looking for product....Same with Lynas.....Same with USA Rare Earths as stated on the REEx podcast.
So what this means...is the negotiations with western RE suppliers has changed permenantly. The ex-china premium is here to stay. And since it take a long time for these mines to come online...this premium will only increase (for say 10 years)...It will take that long for ex-china supply to satisfy the demand.
So this represents a great buying opportunity for the long term investor into the RE sector....rather than these short term traders (vultures).
This was always expected.
And yet the RE investors drop their bundles and run to the hills.
Why?
This has been a great outcome for all RE projects.
Do you really think the west is going to stop diversifying their RE supply chains?
Do you not think that all the western RE customers are wary of China now supplying them RE?
An example......If you are in the board room of a large multinational corporation, and your board says, "what is the risk of us being cut off from China for our NdPr, and what is the extra cost to be supplied from a western source?" And the answer is....we don't know what will happen in the future....and there is a small premium for ex-china supply...which in the scheme of our total costs is tiny....but not having supply would disrupt our entire products production.....
Ummmmm the answer has just become apprant to all the boards on all these companies. Have a look at the MP Materials latest report...where it said it had fielded tons of enquires from concerned companies....looking for product....Same with Lynas.....Same with USA Rare Earths as stated on the REEx podcast.
So what this means...is the negotiations with western RE suppliers has changed permenantly. The ex-china premium is here to stay. And since it take a long time for these mines to come online...this premium will only increase (for say 10 years)...It will take that long for ex-china supply to satisfy the demand.
So this represents a great buying opportunity for the long term investor into the RE sector....rather than these short term traders (vultures).
