Peak commodity – probably a flatter curve than you think

A while back the scare stories were about China restricting the supply of rare earth elements used in electronic devices. Those scare stories ignored, as seems usual, what happens when a cheap source decides to not be so cheap. Engadget reports Global rare earth supply deficit should turn into a surplus by 2013, Goldman Sachs says.

Goldman’s analysts constructed their projections based on evidence that many Western companies have begun building their own mines, in response to China’s overwhelming market dominance. Today, the People’s Republic produces about 90-percent of the world’s rare earth minerals — a group of 17 elements that are used to manufacture many of the flat screen TVs, hybrids and cellphones

Like with oil right now, the sources are constrained and will be until the pressures mount to open new sources or technology invents improvements or replacements. With oil it is mostly political but the recent surge in natural gas production due to technology improvements has not only got the anti-oil contingent in full fear mongering mode, it also has sales of Honda’s natural gas powered civic up.

Another story had copper prices down as well.

It’s not a simple market and there are many influences and factors that come down to a simple number – the price. And that doesn’t hold still. Try to get a hold on something like the rare earth elements or oil and you have to be careful not to push too far. The more your control becomes evident or the higher the prices you try to maintain, the greater the odds that someone else is out to bypass you. OPEC has been playing the game for years to keep prices as high as they can without loosing the market. China is learning about this with their efforts. It is one reason why the peak commodity fear mongering really doesn’t have much reality to go with it.

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