Far East Capital Newsletter
Rare earth prices and supply chain issues
18 Mar 2023

In This Issue

Rare earth prices and supply chain issues

At the moment, with investors trying to figure out what the Silicon Valley Bank failure really means, we have a new factor out of left field that was causing anxiety in the market last week.

Failure of banks is nothing new in the USA. As one US commentator said "it is a run-of-the-mill bank failure" and "it is just taking out the trash" We are seeing a typical reaction in the stock market that is discounting all things financial. However, the fear can escalate as we have seen with headlines regarding Credit Suisse and the possibility of large losses on its bond portfolio.

We had the run up in rare earth company share prices last year, and the almost daily occurrence of new discoveries by explorers saying, "we've got rare earths too!" but the sector has come off the boil in 2023. Is it because there are too many players in the sector now, or because rare earth oxide prices have halved since this time last year? Maybe it is both, but we offer a few more thoughts below. 

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