China's Rare Earth Clamp Down Poised to Benefit Quest Rare Minerals and Avalon

The Paragon Report Provides Equity Research on Quest Rare Minerals & Avalon Rare Metals

Marketwired

NEW YORK, NY--(Marketwire -11/08/11)- Chinese Rare Earth prices have been hammered in recent weeks as small companies which possess rare earths from unidentified sources begun to dump their inventory of rare earth minerals on the market, Economic Information reported. The year-long pattern of rising rare earth prices started to reverse in July when orders from downstream customers shrunk by half from the second quarter, while two-thirds of the downstream companies either halted production, or were operating at reduced capacity. The Paragon Report examines investing opportunities in the Rare Earth Industry and provides equity research on Quest Rare Minerals Limited (AMEX: QRM - News) (TSX-V: QRM - News) and Avalon Rare Metals, Inc. (AMEX: AVL - News) (TSX: AVL - News). Access to the full company reports can be found at:

www.paragonreport.com/QRM

www.paragonreport.com/AVL

China's largest rare-earth producer said that it would suspend smelting and separation work for a month to use its market power to rally falling rare earth prices. Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech, which accounts for nearly half of the world's light rare-earth production, said that the move was aimed at "balancing supply and demand."

Two congressional sources told dealReporter that the decision by Inner Mongolia Baotou Steel Rare-Earth to stop production for a month was described as a "wake up call." The congressional sources argue that the creation of a US rare earth strategic reserve is more likely to get the go-ahead after China's largest exporter halted production. Such a move would create another source of demand for the metals, likely aiding a rebirth of the US rare earths industry.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the rare earth industry register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.

China has continued clamping down on production and sale of rare earth elements, citing a need to clean up highly polluting production processes and to stop illegal exports. Beijing said it cracked down on smuggling of rare earths and impose quotas for exports of rare earth alloy products as part of its campaign to strengthen control over the sector.

Statistics collected in Hong Kong show exports of rare earth metals have shrunk in half over the past year.

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