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Toronto, Aug 24, 2010 (ABN Newswire) - Avalon Rare Metals Inc. (
TSE:AVL) (OTCQX:AVARF) announce in our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue this Industry Bulletin which reports on rapidly rising prices for the full range of rare earth element oxides. These significant price increases are in most part attributable to China's recent decision to impose a further reduction of rare earth export quotas, compounded by rising demand for these elements outside China as consumers scramble to secure supplies.
Based on data reported by Metal-Pages(TM) and Asian Metal(TM) prices for individual rare earth oxide have risen between 22% and 750% since January, 2010, although the most significant rises have occurred since the June announcement on export quota reductions. The largest percentage price increases have been for cerium and lanthanum, which most analysts believe is largely due to China's exporters limiting exports of the low valued light rare earths in favour of the high valued heavy rare earths, creating an artificial (and likely temporary) shortage of these light rare earths outside China. However, there is also increased demand anticipated in the catalyst and battery markets for cerium and lanthanum, the latter linked to growing demand for hybrid and electric cars.
With the exception of terbium, today's prices for all the rare earths are the highest they have been since 2001, when price data became more widely available for individual rare earth elements. Based on a simple, un-weighted, arithmetic average, rare earth prices as a group have risen a remarkable 300% since the beginning of 2010! This has no doubt contributed to the increased trading activity witnessed recently in the shares of rare earth companies such as Avalon.
China's Ministry of Commerce had also indicated that it would implement a range of policies putting the government in control of private and unauthorized mines that produce rare earth elements (especially from the heavy rare earth-rich South China ionic clays), implementing stricter regulations towards improving environmental performance of its mining sector, and requiring foreign companies to move factories to China to complete production of items using rare earths.
The following table illustrates the change in prices for each of the most commonly traded rare element oxides based on data reported by Metal-Pages(TM), and Asian Metal(TM) on an 'USD FOB ex-China per kilogram' basis. For simplicity, the prices documented are the mid-points between the bid and the ask prices on the reference dates.
With the recent completion of a positive prefeasibility study, Avalon is moving forward rapidly with the development of its Nechalacho rare earth elements deposit at Thor Lake, NWT, the most advanced potential new source of heavy rare earth elements in the world.
TSE:AVL) (OTCQX:AVARF) announce in our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue this Industry Bulletin which reports on rapidly rising prices for the full range of rare earth element oxides. These significant price increases are in most part attributable to China's recent decision to impose a further reduction of rare earth export quotas, compounded by rising demand for these elements outside China as consumers scramble to secure supplies. Based on data reported by Metal-Pages(TM) and Asian Metal(TM) prices for individual rare earth oxide have risen between 22% and 750% since January, 2010, although the most significant rises have occurred since the June announcement on export quota reductions. The largest percentage price increases have been for cerium and lanthanum, which most analysts believe is largely due to China's exporters limiting exports of the low valued light rare earths in favour of the high valued heavy rare earths, creating an artificial (and likely temporary) shortage of these light rare earths outside China. However, there is also increased demand anticipated in the catalyst and battery markets for cerium and lanthanum, the latter linked to growing demand for hybrid and electric cars.
With the exception of terbium, today's prices for all the rare earths are the highest they have been since 2001, when price data became more widely available for individual rare earth elements. Based on a simple, un-weighted, arithmetic average, rare earth prices as a group have risen a remarkable 300% since the beginning of 2010! This has no doubt contributed to the increased trading activity witnessed recently in the shares of rare earth companies such as Avalon.
China's Ministry of Commerce had also indicated that it would implement a range of policies putting the government in control of private and unauthorized mines that produce rare earth elements (especially from the heavy rare earth-rich South China ionic clays), implementing stricter regulations towards improving environmental performance of its mining sector, and requiring foreign companies to move factories to China to complete production of items using rare earths.
The following table illustrates the change in prices for each of the most commonly traded rare element oxides based on data reported by Metal-Pages(TM), and Asian Metal(TM) on an 'USD FOB ex-China per kilogram' basis. For simplicity, the prices documented are the mid-points between the bid and the ask prices on the reference dates.
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Rare Earth Oxide As of Jan 5 2010 As of Aug 5 2010 %Increase
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Heavy Europium 485 590 22
Rare Terbium 365 605 65
Earths Dysprosium 117.25 286.50 144
Yttrium 10.25 34.50 236
Gadolinium 6.75 40.00 490
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Light Neodymium 22.50 55.25 145
Rare Praseodymium 21.50 54.50 155
Earths Lanthanum 5.60 33.50 500
Samarium 3.95 31.80 720
Cerium 4.15 33.00 695
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There is general consensus that there will be growing demand for rare earths to enable Clean Technology and tight supplies (especially for the heavy rare earths) until new projects such as Nechalacho come on stream over the next five years. Consequently, significant prices increases are anticipated, although the magnitude of the recent increases has surprised many industry observers. In some cases, individual rare earth prices are already ahead of price forecasts for 2015!With the recent completion of a positive prefeasibility study, Avalon is moving forward rapidly with the development of its Nechalacho rare earth elements deposit at Thor Lake, NWT, the most advanced potential new source of heavy rare earth elements in the world.
About Avalon Rare Metals Inc.
Avalon Rare Metals Inc. is a mineral development company focused on rare metals deposits in Canada. Its flagship project, the 100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the world. Its exceptional enrichment in the more valuable 'heavy' rare earth elements, which are key to enabling advances in green energy technology and other growing high-tech applications, is one of the few potential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones.
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