The Senkaku boat incident in September 2010 was the catalyst for a Chinese embargo on rare earths, leading to a historically strong upswing in prices.
ZURICH, SWITZERLAND / ACCESSWIRE / July 24, 2018 / This summer's blockbuster, playing in every home, is the return of a bull market in REEs ("Rare Earth Elements") caused by the Trump Administration applying tariffs on goods from China. I am calling it "Senkaku 2" as the next embargo on REEs is, again, just a seemingly trivial incident away.
You may remember that Japan's coast guard arrested an errant Chinese fishing boat captain in September 2010, with the result of a total embargo on REE shipments to Japan causing REE prices to go up as much as 3,000% almost overnight. Consider the economic impact of Japan arresting one Chinese national, and compare that to the billions of dollars, and trillions of yuan, in economic impact of the new tariffs, and then ask yourself: What is China likely to do now? How about another total embargo of all key resources from China?
Whatever the incident will be this time, if any at all, China is about to strike back with a retaliatory response that may very well involve REEs and other commodities deemed critical for the economic and national security of the United States.
In a trade war with China, there will not only be losers but also winners – and it is not hard to see who they will be, although global media just seems to focus on the losers right now. One of the winners is certainly going to be the mineral exploration industry outside of China, as the United States – and perhaps the Western World – realigns commodity distribution routes. While the stage is set, the time to act has come, for nations and investors alike.
Today, Commerce Resources Corp. (TSX.V: CCE; OTC PINK: CMRZF; FRA: D7H) announced the first ever production of a mixed rare earth oxide concentrate from material of the Ashram REE Deposit in Québec. This independent success was achieved by Québec City's Universitè Laval, a public research university founded in 1663 and thus the oldest centre of higher education in Canada. Saville Resources Inc. (TSX.V: SRE; Frankfurt: S0J) may also turn out as a winner of the escalating trade war between China and the US.
The full report can be accessed with the following links:
English (web version): http://rockstone-research.com/index.php/en/research-reports/4943-SENKAKU-2-Total-Embargo
English (PDF): http://rockstone-research.com/images/PDF/Commerce28en.pdf
German (web version): http://rockstone-research.com/index.php/de/research-reports/4941-SENKAKU-2-Total-Embargo
Disclaimer: Please read the full disclaimer within the full research report as a PDF as fundamental risks and conflicts of interest exist.
SOURCE: Rockstone Research