Maybe the rare earths aren’t as rare as we thought.
Shares of the rare earth stocks, notably Vancouver-based trader Rare Element Resources and Colorado’s Molycorp, plunged Thursday after the New York Times reported China had resumed shipments of rare earth elements.
Shares of the Van Eck Market Vectors Rare Earth Strategic Metals exchange-traded fund dropped 1% in their debut, reversing the morning’s 2% gain.
Molycorp, which is poised to become the lone U.S.-based rare earths miner, had tripled since its July debut but saw its shares tumble 11% to $34. Rare Element, which has seen its shares rise tenfold from $1 and change, slid 12% to $11.18.
Stocks of the rare earth element producers soared this summer amid questions about China’s plans for exporting the minerals, of which it currently controls some 97% of global production. But as with so many assets at a time of free money, that rally fed concerns that the rare earth stocks were in a bubble.
A few more days like Thursday and at least we won’t have to worry about that anymore.