Rare Earth Element (REE) stocks have been discarded along with most of the junior mining sector. Jeb Handwerger, a stock analyst, sees supply problems for the heavy REE until 2015. He believes the rare earth sector will break out of the downtrend soon.
After a flurry of excitement in 2010 as the importance of REE and their scarcity dawned upon the world, the sector has sunk even deeper than their precious metals and base metals peers as the Fukushima disaster eliminated more than half of the demand for rare earths outside of China.
Despite these short to mid-term issues, the fundamental scarcity of REE is real, and with no significant amounts of additional heavy REE coming to the markets, this will last at least until 2015 for the more valuable heavy REE. This dire situation, which is likely to impact the high-tech, green-tech and automotive industries, leads Handwerger to believe there is a real crisis ahead. Instead of QE3, he propagates RE1 in order to address the upcoming shortages.