This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Rare Earth “Mega-company” Taking Shape

The announcement had an immediate effect on the market, with the cost of most REEs defying analysts' predictions with steep price increases; dysprosium, for example, doubled in value. However, this rally proved to be short-lived, and prices plummeted back down in 2012.

Though the plan has been in the making for years, the timing of Baotou Steel Rare-Earth's most recent move was a curveball as it came straight after the company's announcement that it will continue production halts at its factories for a third consecutive month in an effort to stabilize slumping market prices.

Plan outline

Details of the latest plan suggest there are 35 rare earth miners and processors involved in the framework. Baotou Steel Rare-Earth will be in charge of mining, selection of mine locations, processing, management and separation, according to China Daily. In April last year, the organization offered subsidies to 22 upper-stream rare earth companies that had closed as a result of struggling market conditions. It also opened up an integration process to another 13 enterprises.

The China Daily article states that the final list of companies to be integrated includes Baotou Jinmeng Rare Earth, Baotou Xinyuan Rare Earth Hi-tech and New Material and Baotou Xinye New Material.

When the integration is complete, Baotou Steel will be responsible for marketing and sales strategy, as well as the industry and product layout of all parties concerned. For now, it will support the 12 parties in areas relating to production and export quotas.

Only the beginning

Investors will be watching the effects of this scheme with much interest, especially considering comments made last year by Baotou Steel's general manager, Zhang Zhong.

Zhong said that if this initial stage is successful, Baotou Steel will also expand and will eventually team up with major rare earth producers in the provinces of Gansu, Sichuan and Shandong, according to China Daily.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs