That’s because for the past few years, China has been in a dispute with the United States, Europe, and Japan over its exports of rare earth metals. Though China has about 30% of the world reserves of rare earths, it controls 80% of international production.
In March, the World Trade Organization (WTO) announced that China violated international trade laws by placing trade quotas and taxes on exports on rare earth minerals. Through these actions, China attempted to slash its rare-earth exports by 35% to 40% in 2014.
The U.S. objected, and the WTO issued a warning in late March. China responded with a pledge to appeal the ruling.
As this battle rages on, one thing is clear: The international solar industry could be turned on its side if China begins to hoard these metals and drive up their cost.
Certain alternative energy stocks are more vulnerable than others, while some are poised to corner the market thanks to their manufacturing networks inside China.
Of course, whenever there is market disruption like this, there is profit opportunity…
Here’s how the alternative energy market is shaping up, and how to profit from this ongoing trade drama.
Why Rare Earth Metals Generate Profits
Rare earth metals are a group of 17 minerals that are central to the manufacturing of some of the most profitable products on the market today: solar panels, high-tech gadgets like mobile phones, hybrid car batteries, and products used by the defense industry.
U.S. manufacturers need these minerals to build clean technologies like solar, wind, and geothermal.