Mastering the Commodities Markets

HEDGING AND TRADING

How does an investor get exposure to the REE markets or indeed hedge an exposure? Investors have the possibilities of buying/selling the physical rare earths themselves, but there are difficulties as there are no formal REE commodities exchanges. There are also very few intermediaries as the end product often goes straight to the end user. Trade magazines are a good source of data as there is no open trade in these minerals (see www.metalspages.com). REEs are also not exactly the type of commodity that you can store easily. Another issue will be lack of liquidity and the absence of a large number of market makers.

The only real alternative for would-be investors is to purchase the shares (stocks) of the mining and production ...