Apple, Tesla, Raytheon Seen Taking Hit On Rare Earth Shortages

[Elderberry]

Investopedia  By Mark Kolakowski May 30, 2019

A major risk of the U.S.-China trade war that stock investors have overlooked until now is the dependence of dozens of big American companies on rare earth materials to make products, generate revenue and profit growth, and boost their stock prices. Now China's threat to use its dominant global position in exporting rare earth materials as a trade war bargaining chip threatens to disrupt the growth of U.S. companies, including Apple Inc. (AAPL), electric car manufacturer Tesla Inc. (TSLA), and defense contractor Raytheon Co. (RTN), according to Barron's, as well as other military contractors including Lockheed Martin Corp. (LMT), according to other reports.

The impact on the U.S. economy would be broad and deep if China chose either to cut off exports or, more likely, to curtail the supply sharply. That would send rare earth prices soaring and. in turn, boost prices of many consumer and industrial goods. About 80% of the rare earth materials used in the U.S. is imported from China for use in mobile phones, personal computers, magnets, rechargeable batteries, auto parts, and advanced military hardware, among other things.


More: https://www.investopedia.com/apple-tesla-raytheon-seen-taking-hit-on-rare-earth-shortages-4688904

[Wingnut]

The US has not developed their rare earths mining and processing industry for many years, for decades, even though they are very rich in rare earths resources.   

Looks like a great opportunity awaits some enterprising company's willing to take a risk.

America 1st!

[Wingnut]

The U.S. has 1.4 million metric tons in rare earth-mine reserves, 93 times the nation’s output last year, according to data from the U.S. Geological Survey website. The country’s only producer, MP Materials, has been shipping all its output from the Mountain Pass mine in California to China because there is no refining capacity available to handle its output anywhere else in the world, its biggest shareholder said.

https://www.latimes.com/business/la-fi-china-rare-earth-supply-20190604-story.html

[kevindavis007]

The US has not developed their rare earths mining and processing industry for many years, for decades, even though they are very rich in rare earths resources.   

Looks like a great opportunity awaits some enterprising company's willing to take a risk.

America 1st!

America 1st if it means screwing with the economy right?

[Wingnut]

America 1st if it means screwing with the economy right?

I am pretty sure you are one f'd up Globalist.  May you reap your rewards for hating America. 

[kevindavis007]

I am pretty sure you are one f'd up Globalist.  May you reap your rewards for hating America.

Why cause I like to buy products that are cheap?

[Wingnut]

Why cause I like to buy products that are cheap?

As you are self proclaimed cheap bastard, you have to ask yourself one question

[kevindavis007]

As you are self proclaimed cheap bastard, you have to ask yourself one question

I thought conservatism was about choice. You know the freedom to spend my money as I please. If I want to buy a cheap widget from another country at a cheaper price then a expensive widget made in America. Buying products from different countries doesn't make me a traitor.

[jmyrlefuller]

I thought conservatism was about choice. You know the freedom to spend my money as I please. If I want to buy a cheap widget from another country at a cheaper price then a expensive widget made in America. Buying products from different countries doesn't make me a traitor.

Providing the enemy aid and comfort in the form of money is, absolutely, treason.

[thackney]

Providing the enemy aid and comfort in the form of money is, absolutely, treason.

Idiotic statement and claim.

Making American Manufactures pay a higher price for feedstocks than the rest of the world pays will shrink, not grow, our economy.

[IsailedawayfromFR]

I thought conservatism was about choice. You know the freedom to spend my money as I please. If I want to buy a cheap widget from another country at a cheaper price then a expensive widget made in America. Buying products from different countries doesn't make me a traitor.

Yes, it is choice.

You always have the choice to move to another country that you can live cheaper than this one, if your primary motivation in life is living cheaply.

Mine is strengthening America for the long term.

[IsailedawayfromFR]

Idiotic statement and claim.

Making American Manufactures pay a higher price for feedstocks than the rest of the world pays will shrink, not grow, our economy.

We are talking about rare earths.  That right now is controlled by China.

Are you advocating we take it from them to make it cheaper for us?

[Victoria33]

We had one company refining rare earth material in Reading, Penn.  Bob worked with that material there in the 1980s in graduate school - he is an earth scientist.  He tells me in the later 1980s, the EPA put so many restrictions on the company, they had to shut down.  Now, we have no company that refines it.

[libertybele]

America 1st if it means screwing with the economy right?

Look at the bigger picture long term here.  IF the tariffs in China make an impact and we indeed then experience FAIR trade in lieu of FREE trade our country will benefit BIGLY.  IF not, we indeed are screwed.  IMHO, Trump is gambling and hoping that he wins the 'trade wars'.  I think he realizes as well as anyone else, with the current situation at the border and if these tariffs fail to accomplish his agenda, he won't win re-election.

[thackney]

We are talking about rare earths.  That right now is controlled by China.

Are you advocating we take it from them to make it cheaper for us?

How in the world do you read my comments on this thread and wonder if I meant attacking China????

[catfish1957]

One very interesting take on our economy is that we configured to be near "real time" in market moves vs. events.  I think we are already seeing the factoring in (mostly) of the impact of a rare earth metals embargo.

China OTOH....   This is new ground for them.  They have very little experience with capitalistic economic crisises. 

These things unfortunately sometimes morph into a miltary option.  I think we are in for a very nervous 3 or 4 years.

[IsailedawayfromFR]

How in the world do you read my comments on this thread and wonder if I meant attacking China????

I did not say that.

You made a basic claim that higher costs in feedstock for manufacturers makes America less competitive.

I happen to agree generally with that, but how does that translate for the topic at hand, rare earth minerals, when China controls them right now?

Presumably it does because it is cheaper to mine it there rather than here, but I really do not know.

So how do we make them cheap for our feedstock other than coerce China?

[thackney]

I did not say that.

You made a basic claim that higher costs in feedstock for manufacturers makes America less competitive.

I happen to agree generally with that, but how does that translate for the topic at hand, rare earth minerals, when China controls them right now?

Presumably it does because it is cheaper to mine it there rather than here, but I really do not know.

So how do we make them cheap for our feedstock other than coerce China?

Export the EPA, OSHA and associated regulations to China.

[Smokin Joe]

I thought conservatism was about choice. You know the freedom to spend my money as I please. If I want to buy a cheap widget from another country at a cheaper price then a expensive widget made in America. Buying products from different countries doesn't make me a traitor.

This is about more than your toys.
 
Having our own means to produce and refine the minerals which go into components for things like missile guidance systems just might be a matter of national security. 

[IsailedawayfromFR]

Export the EPA, OSHA and associated regulations to China.

I'll go along with that in a heartbeat.  It may be enough.

It would shave off at least 15% to 20% in the price to mine other materials as well, such as petroleum.

One other thing I would also attack:  Payouts from lawsuits. Way too many ways legally one can force companies to cough up money which enrich lawyers.  Example is the ridiculous suits against J&J related to use of talc, and monetary rewards of a % of company profits which have no bearing on damages incurred.

[Fishrrman]

Unless I'm mistaken, the United States has quite large reserves of rare earth materials.

What we DON'T have, however, is the will to mine and refine the stuff.

Fearless prognostication:
If we DID acquire "the will" to do so, we wouldn't need to import ANY rare earth products from China at all.