Pay close attention to the rare earth story.
China’s decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world, says Reuters.
And unfortunately, as expected, it’s starting to have a big impact.
As noted by CNBC:
“Several European auto supplier plants and production lines have already been shut down due to China’s recent export controls, according to Europe’s auto supplier association CLEPA, with the group warning of more outages as inventories deplete. Germany’s car industry and auto executives have also sounded the alarm, saying the highly globalized sector is acutely vulnerable to further supply chain disruption.”
Without rare earths, the world can’t produce the millions of electric vehicles government leaders want on the roads. We can’t produce smart phones, computers, flat panel televisions, wind turbines, electric vehicle batteries, computer chips, defense equipment, semiconductors, digital cameras, or catalytic converters…
So, we really have no choice but to find a safer source elsewhere.
All of which creates more opportunity for rare earth stocks ETFs such as:
VanEck Rare Earth and Strategic Metals ETF (SYM: REMX)
The VanEck Rare Earth and Strategic Metals ETF is an exchange traded fund launched and managed by Van Eck Associates Corporation. It invests in public equity markets of global region.
It invests in stocks of companies operating across materials, metals and mining sectors. It invests in growth and value stocks of companies across diversified market capitalization. It seeks to track the performance of the MVIS Global Rare Earth/Strategic Metals Index.
Sincerely,
Ian Cooper
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