REMX: A Potential Bottom In The ETF

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A bearish trend but signs of a significant bottom.Commodities are cyclical.China controls most of the world’s rare earth metals supplies.REMX has significant lithium exposure.Action speaks louder than...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nREMX: A Potential Bottom In The ETF\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-31 00:38 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4730921-remx-potential-bottom-in-etf><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>A bearish trend but signs of a significant bottom.Commodities are cyclical.China controls most of the world’s rare earth metals supplies.REMX has significant lithium exposure.Action speaks louder than...</p>\n\n<a href=\"https://seekingalpha.com/article/4730921-remx-potential-bottom-in-etf\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"REMX","symbol_name":"VanEck Rare Earth/Strategic Metals ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4730921-remx-potential-bottom-in-etf","article_id":"2479479756","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1331663482/image_1331663482.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2479479756","pubTimestamp":1730306326,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"A bearish trend but signs of a significant bottom.Commodities are cyclical.China controls most of the world’s rare earth metals supplies.REMX has significant lithium exposure.Action speaks louder than words - Rio Tinto believes lithium is at or near a bottom.Olemedia  Rare earth metals are a group of 17 metallic elements. They are unique and have magnetic, conductive, and fluorescent properties. These elements create strong and permanent magnets, essential components for technological products, including smartphones, computers, electric vehicles, wind turbines, medical equipment, and military equipment. Rare earths are also used in certain glass products, phosphors for lighting, and catalysts in industrial products. As the world addresses climate change with alternative and renewable fuels and zero-carbon emitting processes and technology creates new and improved electronics, the demand for rare earth elements continues to grow. The VanEck Rare Earth and Strategic Metals ETF  is a misn","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"REMX":"VanEck Rare Earth/Strategic Metals ETF"},"translate_title":"REMX：ETF的潜在底部","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"REMX":0.9},"content_text":"A bearish trend but signs of a significant bottom.Commodities are cyclical.China controls most of the world’s rare earth metals supplies.REMX has significant lithium exposure.Action speaks louder than words - Rio Tinto believes lithium is at or near a bottom.Olemedia  Rare earth metals are a group of 17 metallic elements. They are unique and have magnetic, conductive, and fluorescent properties. These elements create strong and permanent magnets, essential components for technological products, including smartphones, computers, electric vehicles, wind turbines, medical equipment, and military equipment. Rare earths are also used in certain glass products, phosphors for lighting, and catalysts in industrial products. As the world addresses climate change with alternative and renewable fuels and zero-carbon emitting processes and technology creates new and improved electronics, the demand for rare earth elements continues to grow. The VanEck Rare Earth and Strategic Metals ETF (REMX) is a misnomer. As I pointed out in an April 11, 2024, Seeking Alpha article: REMX's holdings are primarily in mining companies producing lithium…While lithium is a strategic metal, the rare earth holdings are light. Therefore, the ETF's title is misleading. I concluded the article by writing: I am a scale-down buyer of REMX below the $55 level, leaving plenty of room to add on further declines. Technical support remains significantly below the current price level at the 2020 $23.91 low. However, commodity cyclicality could cause lithium production to slow, inventories to decline, and consumer demand to increase at the current price level, leading to a recovery in lithium prices and the REMX ETF, which is really a lithium ETF. The REMX ETF was trading at $54.04 per share on April 11, 2024. Lithium prices have not recovered, and the ETF was around $48.50 in late October after falling to a $36.01 per share low on September 10. Time will tell if the scale-down buying approach to REMX will pay off over the coming weeks and months. A bearish trend but signs of a significant bottom After reaching $127.50 per share in April 2022, the REMX ETF product plunged. Monthly Chart of the REMX ETF Product (Barchart) The chart shows that considerable lithium exposure pushed REMX 71.8% lower to a $36.01 September 2024 low. The September low was higher than REMX's March 2020 $23.91 bottom and critical technical long-term support level. While the long-term chart remains bearish in late October 2024, the short-term path of least resistance has turned higher since the September low. Daily Chart of the REMX ETF Product (Barchart) The short-term chart shows a 41.9% recovery from $36.01 on September 10 to $51.10 on October 7. At around the $47.00 level in late October, REMX remained in a short-term bullish trend. Commodities are cyclical Commodities are cyclical assets. Bear market trends take prices to levels where production declines as producers experience reduced profit margins or losses. As output drops, inventories decrease, consumers increase buying and stockpiling at bargain-basement prices, leading to price bottoms. Conversely, bull markets take prices to levels where production increases as producers take advantage of higher profit margins. As output rises, inventories begin to build, and consumers stop buying at sky-high prices, leading to price tops. Meanwhile, commodities are volatile assets, meaning prices can often rise or fall to levels that defy reasonable, rational, and logical fundamental and technical factors, leading to extreme highs or lows during bull and bear markets. The lithium market has experienced the epitome of commodity cyclicality. Chart of Lithium Carbonate Prices (Lithium - Tradingeconomics.com) The chart shows lithium prices peaked in 2022, leading to a peak in REMX shares. Lithium's price plunge weighed on REMX shares over the past few years. China controls most of the world's rare earth metals supplies The following visual highlights the world's 2023 lithium production by country. Worldwide Lithium Production by Country (www.visualcapitalist.com) While Australia is the leading lithium producer, China is third. However, Australia's geography has made China the mineral-rich country's most significant trading partner. Economic weakness in China has weighed on lithium consumption and Australian exports to China. Since lithium is a critical ingredient in EV batteries, weakness in the Chinese EV manufacturing business has weighed on lithium demand and prices. Meanwhile, China continues to dominate annual rare earth metal production. Rare Earth Metals Production by Country (Statista) The chart highlights China's over 68.5% share of 2023 rare earth metals output. Moreover, trade agreements and investments boost China's control to a much higher share. Economic weakness in China has weighed on lithium and rare earth metals prices. However, the Chinese government rolled out a significant stimulus program in late September to achieve the country's 5% growth target. China cut interest rates and bank reserve requirements to boost economic growth. The government said it is ready to provide further stimulus if necessary. A Chinese economic rebound could increase the demand for lithium and rare earth metals in the world's second-leading economy. REMX has significant lithium exposure The top holdings of the REMX ETF include: Top Holdings of the REMX ETF Product (Seeking Alpha) While REMX has exposure to rare earth metals, as the chart shows, its main components are lithium-producing companies. At $47.07 per share, REMX had over $275.6 million in assets under management. The ETF trades an average of over 141,400 shares daily and charges a 0.56% management fee. The charts show REMX's sensitivity to global lithium prices, which is a function of Chinese demand. Growth in China could lift REMX over the coming months and years. Moreover, commodity cyclicality that creates a bottom in lithium and rare earth metals prices would be bullish for the REMX ETF product. Action speaks louder than words - Rio Tinto believes lithium is at or near a bottom Rio Tinto Group (RIO) has been a commodity producer since 1873. In October 2024, RIO announced it would acquire U.S. lithium producer Arcadium (ALTM) in an all-cash transaction valued at $6.7 billion or $5.85 per share. While the deal may not be a bargain, it reflects the experienced commodity producer's view that lithium prices are near a cyclical price bottom. If RIO is correct, rising lithium prices could lift the REMX ETF. While REMX remains in a bearish trend at $47.50 per share, a rise above the May 2024 $57.05 per share high could end the pattern of lower highs and lower lows, shifting the technical trend from bearish to bullish.  We may have seen a bottom in REMX at just over $36 per share. Given the potential for a recovery in China's economy and the power of commodity cyclicality, I favor a long position in the ETF.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2479479756"}