China Rare Earth (769 HK)'s Wild Price Movement. An Offer In The Wings?

• China Rare Earth Holdings (769 HK), a processor and trader of rare earth oxides/metals, is suspended for reasons unknown.

• But not before gaining 79% month to date. On huge volume. And that gain is after giving back 23% from a recent high close.

• As discussed in Know Your Rare Earth Elements As China Restricts Exports, China recently escalated restrictions on the export of rare earths; although there has been some partial easing.

China Rare Earth Holdings (769 HK) (CREH) is suspended, so there's nothing to be done right now.

This insight provides some background on CREH.

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CREH's Operations

• CREH does not own significant rare earth mines.

  • The key rare earth mines in China, which dominate global supply, are primarily controlled by SOEs and a few large conglomerates under government oversight.

• CREH’s business model is oriented toward processing rare earth concentrates into final products, such as rare earth oxides, metals, and compounds used in applications like magnets, catalysts, and polishing powders.

  • My understanding is that CREH is not a primary processor of raw ore directly from mines.

  • CREH likely purchases rare earth concentrates or semi-processed materials from major suppliers.

• As can be seen from this link, CREH’s product portfolio includes both light rare earths (such as lanthanum, cerium, neodymium, and praseodymium) and heavy rare earths (including dysprosium, terbium, and yttrium).

  • It also produces refractory materials for high-temperature industrial applications.

  • CREH's processing facilities in Jiangsu province focus on transforming these materials into products suitable for downstream industries, such as electronics and electric vehicles.

• There is no publicly available data specifying which rare earth element CREH mines, processes, or sells in the highest volume.

  • You could hazard a guess CREH likely processes neodymium and praseodymium (light rare earths) for magnets used in electric vehicles and wind turbines.

  • And perhaps heavy rare earths such as dysprosium and terbium, which are critical for high-performance magnets.