Rare earth and strategic metals are naturally-occurring elements that are found in extremely rare quantities. Despite their scarcity, many rare earth metals are used in a wide range of products, and as such have become a critical input material for many industries. Uses of rare earth metals include hybrid cars, wind turbines, flat screen televisions and cellular phones.
Rare earth metals include Scandium, Yttrium, Lanthanum, and Cerium (in total, there are 17 rare earth metals).
Significant supply concentrations also characterize the rare earth metals industry, as China accounts for a significant portion of global production. That makes this corner of the commodity market appealing for speculative investors looking to bet that increased demand and potentially volatile supply will send prices higher.
Investment in physical rare earth metals is not a feasible option for many investors, but there are several ways to gain exposure to this asset class. These include ETFs and futures contracts.