Hot Money Hoarding Rare-Earth Gambling Prices

There are indications that the "scenery" of rare earth is slowly turning to "madness".

Recently, reporters from Jiangxi

"Indeed, there are enterprises that reflect this to us."

Wang Caifeng, a senior expert in the industry and a member of the preparatory group of rare earth Association, confirmed the above 29 days in an interview with reporters.

Judging from the current average increase of nearly 100% of the price, the former "cabbage price" of rare earth has ended.

It is worth noting that with the intervention and speculation of a large number of speculative funds, the price of rare earth is being artificially created and the risk is accumulating.

"They (speculative funds) do not consider the price at all, so long as there is rare earth."

Jiangxi Ganzhou a large rare earth enterprise official said.

He revealed to reporters that, especially in the past two months after the Spring Festival this year, a large number of social capital began to pour into the rare earth industry, and purchased rare earth in large quantities of rare earth production areas in Baotou and Jiangxi.

"Judging by my experience in the rare earth industry for many years, these big buyers are not really downstream users, but are buying them after hoarding."

These people said.

According to him, in the influx of hot money, including Wenzhou, Zhejiang and other parts of the social capital.

They have a very clear "consistency": the financial strength is very strong. When buying rare earth, they almost do not ask the price, and each purchase quantity is very large.

"Because it is widely expected that the price of rare earth will rise, not only many industry enterprises are competing for procurement, but also a lot of speculative funds are being sought for rare earth."

Heng Kun Securities chief analyst Heng Kun told reporters that a large influx of funds and began to hoard rare earth, resulting in a shortage of rare earth supply, and further pushed up the price of rare earth, and price increases will attract more social capital into the rare earth industry for speculation.

In fact, the price of rare earth has started to soar this year under the dual functions of industry policy and market expectation.

The price of light rare earth products such as praseodymium oxide and neodymium in March 25th reached 459 thousand yuan / ton and 575 thousand yuan / ton respectively, which rose 118% and 120% over the end of 2010, while the prices of heavy rare earth products such as dysprosium oxide and terbium oxide were 2842.5 yuan / kg and 4900 yuan / kg respectively, up 104% and 81.5% over the end of 2010.

"We (rare earth enterprises) feel that the current price is terrible, but the people outside (speculative capital) still feel that they will go up."

A rare earth processing enterprise manager, who does not want to be named, said.

He admitted to reporters that it is very difficult to buy rare earth materials from the market at present. Not only that, the current price has already made many small and medium-sized downstream processing enterprises unable to continue production, many manufacturers have begun to cut production.

In this regard, Heng Kun said that with the introduction of a large number of speculative funds, the price of rare earth has gradually deviated from the normal price increase, which will inevitably cause the accumulation of bubbles.

The price increase of rare earth will gradually be pmitted to downstream enterprises. Once the downstream enterprises are unable to bear such a price increase, it will bring risks to the whole industry.