Rare and minor metals （RMM） equities had made considerable share price gains in the past 12 months, parallel with the metal prices, equity research firm Resource Capital Research （RCR） reported on Friday.
Sydney-based RCR, which focuses on small and mid-size firms, noted that companies with good quality projects have retained most of their gains from the second half of 2010, and remained close to yearly share price highs.
“Metal prices have risen across the board in the past year, with a lot of the action occurring in the past three months,” says RCR analyst Trent Allen.
“The rare earths get a lot of attention from commentators due to their political and economic sensitivity and some extreme gains in value: an average 679% over 12 months, and 48% over three months, the latter from a very high base.
“Rare earth elements have become symbolic of the profound influence of Chinese policy - tighter export quotas, stockpiling and enforced supply chain mergers - on specialty metal markets.”
The main commodity and equity market driver is China, and it would likely so for the foreseeable future, Allen said.
“China is reforming its RMM sectors, by raising tariffs, reducing export quotas, stockpiling metal to ensure a steady supply, and encouraging consolidation and vertical integration of production.”
China’s stated aims were to increase domestic value adding and use of the RMM, conserve resources, and improve industry monitoring and efficiency. Allen noted that China’s actions could boost global RMM production.
“Other metals such as tungsten and tantalum are at record （nominal） highs, with markets anticipating tighter supply conditions as China moves towards vertical integration and domestic value adding in the RMM space.”（miningweekly.com）
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