MCP will move with APPL Tomorrow!!
Molycorp, Lynas Surge As China Eliminates Export Tariffs On Rare Earths
Apr. 27, 2015 11:00 AM ET | by Shock Exchange | about: mcp | includes: lysdy, lyscf
Summary
Reports have surfaced that China plans to eliminate export tariffs on rare earths.
Lynas' CEO believes such a move will prompt buyers to return to the rare earth market.
Any evidence of a substantial increase in demand could send shares of Molycorp and Lynas violently higher.
According to the Financial Times China has decided to eliminate export tariffs on rare earth metals:
China will eliminate its export tariffs on rare earths and other metals, the Ministry of Finance said on Thursday, ending a controversial policy that caused a diplomatic row and international trade dispute ... Eliminating the tariffs is part of a more general streamlining designed to reduce the red tape that allows corruption to flourish at government departments and state-owned enterprises.
An export tariff is essentially a tax on products exported from a particular country. They increase export costs and can hurt demand for a particular product and create trade barriers. One would think the elimination of the export tax would drive down prices and cause angst for rare earth miners Lynas (OTCPK:LYSCF), (OTCQX:LYSDY) and Molycorp (NYSE:MCP); however, Lynas' CEO believes the move will unleash pent up demand for rare earths:
AI
