Five years ago it seemed that rare earth (aka “REE”) prices were going to the moon. Prices rising in response to a strong supply/demand story, strength in commodity markets, and fear that the Chinese might cut off supply to the rest of the world. This last point in particular drove REE prices much higher on a relative basis than any other commodity during the 2009-11 boom. Since then sentiment has reversed: REE stocks have been the worst of any sector we’re aware of, with shares of many companies falling 95% or more. Most companies that remain in the business have radically changed their business models in order to reflect falling prices and oversupplied markets. Despite this pain we find that many of the fundamental drivers of the market 5 years ago are intact, and in some cases they are arguably stronger today than they were. While certain markets have been
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