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November 5 2021

1. Magnetic attraction…

The price of NdPr, or neodymium and praseodymium (two light rare earth elements), has gapped up >20% in the last month. Reports suggest China is holding back their supply due to increased environmental regulations. NdPr is a key component of high performance magnets, which are used in electric vehicles, as well as some speakers, industrial robotics and medical devices like MRIs.

Lynas, a key portfolio holding, is the only large scale rare earths producer outside of China. This week Lynas and Japan (Japan Oil, Gas and Metals National Corporation) signed a ‘letter of agreement reconfirming support for Lynas’. This showed how important the material is for Japan, as they further deferred interest repayments on their loan to Lynas with no penalty or additional interest.

2. Grocery bill$…

Global food costs jumped last month according to a UN index tracking staples. The basket was up 3% in October to a fresh decade high, adding inflationary pressure on consumers and governments **hint hint BoE!

3. Retail power…

Retail investors added +$5.6B worth of equity fund demand every day last week, totaling +$28 Billion of inflows into equities in the week. US households now own 38% of the $75 Trillion US corporate equity market. This is a 2% increase since the start of the year, and this increase is nearly the full size of the Hedge Fund industry, which is 3% of the market!

Source: UBS