Nov 9 2010
New players continue to emerge in the industrial metals sector. With technology expanding at exponential rates, certain elements are becoming increasingly important to our daily lives. In recent months Wall Street has begun to take notice of the metals that are the life blood of modern computers, batteries and alternative energy.
For instance, there are nearly ten pounds of the rare earth element, lanthanum, in every Toyota Prius engine. In addition, rare earth elements are vital to military technology. Also generating a lot of buzz is Silver, considered to be both a precious metal as well as an industrial metal. According to The Silver Institute, at least half of the demand for silver is for industrial use, with silver being applied to batteries, brazing and soldering, bearings and electronics. The Bedford Report examines emerging Industrial Metals companies and provides analyst research on Molycorp, Inc. (NYSE: MCP) and Hecla Mining Co. (NYSE: HL).
In the last three months, prices of the seventeen "rare elements" have risen more than 30%, leading many analysts to speculate this is a "bubble" market. Mark Smith, CEO of Colorado-based Molycorp, believes that rare earth minerals market is under pressure because of reduced supply by China, however these rising prices do not indicate the market is in a bubble.
While China continues to dominate the rare elements market -- at the moment China accounts for as much as 95 percent of global production of rare earth metals -- the US hopes to re-establish itself as a global leader in Rare Element production. Last month the US House of Representatives passed the Rare Earths and Critical Materials Revitalization Act of 2010, which supports the discovery and development of rare earth sites inside of the United States.
The Bedford Report releases regular market updates on the blossoming industrial metals sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns.
While some may choose to call the Rare Elements Market a bubble, very few would dare refer to the silver market as one. Comparing the SLV Silver ETF and the GLD Gold ETF, we see that silver has outperformed gold over the past month, rising more than 11%. With Silver prices surging to their highest levels in thirty years, investors have turned their attention to the silver miners, which have been posting excellent earnings as of late. Last month Hecla Mining posted third quarter EPS of six cents. The company generated $41.9 million in net cash from operating activities in the third quarter for a total of $115.3 million for the nine months period of 2010, up from $32.3 million and $51.9 million for the same periods in 2009.
Source: http://www.bedfordreport.com/