No day without new news from China on the economic situation and government measures. No day without us Dax-Records and discussions about the aftermath of the financial repression and Draghi's bond-buying program that has now begun. As strange as it may look in the eyes of the Greeks - with a few exceptions, the world is currently experiencing an unbelievable glut of liquidity and historically low interest rates. For private investors, it is now a question of saying goodbye to the traditional interest savings they have cherished and investing in real assets.
What is the most important motto in the real estate market - "location, location, location" - can easily be transferred to the popular monetary strategy of German citizens: "Tangible assets, tangible assets, tangible assets!" Despite the huge problems in Europe and the threatening-looking East -West tensions do not necessarily have something to do with "flight" into the material assets. But private investors should spread opportunities and risks across asset classes. And strategic metals can be a valuable part of the portfolio in the long term. This is where the music plays in China. This emerges from the new newsletter for investors of Frankfurter Tradium GmbH, which is one of the European market leaders in strategic metals.
There had been much speculation about the direction of rare earth prices after the end of Chinese New Year celebrations. In the meantime, it is clear: since the beginning of March many rare earth metals continue to rise! Driven by Chinese government expectations of building new strategic reserves, producers are increasing their prices. In addition, there are major acquisitions of the investment platform Fanya, which deprives the market of significant amounts of dysprosium, terbium and neodymium.
The fundamental consolidation is also progressing further. Beijing wants to better control the market for rare earths and bundles the many small businesses in six large groups of companies. New projects will not get approval if they are not located in the big ones. Finally, China Daily reports that eight central government agencies have issued a joint statement calling on provincial governments to expose illegal activities and impose severe penalties. Results should be presented by mid-April. Beijing seems anxious to bring the prices of rare earths up again in a sustainable manner through the various measures.
According to estimates by the Chinese Rare Earth Industry Association, the illegal share has taken up more than 50% of the market in recent years. A dramatic collapse in prices was the result. And Beijing is now trying with all its might to bring this back into the right balance. Conclusion from Tradium: “It is more than speculation that the official bodies will also succeed. From this side, too, impulses for rising prices - the German investor can benefit from it! "
