From stockhead September review6 Oct 2022 11:24
Rare Earths
Price (NdPr Oxide): US$94.15/kg
%: +8.73%
Lynas Rare Earths (ASX:LYC) started the year like a house on fire but is quietly down around 32% year to date, a signal of how erratic the NdPr market has been in 2022.
Having risen consistently to ~US$175/kg earlier this year the heat had well and truly come out of the rare earths market in China by August, dropping to around US$86/kg.
That remains well above historic levels.
Prices experienced a bounce in line with pre-holiday restocking in China. Whether they continue to recover remains to be seen.
“Large magnetic material companies said their new orders rose slightly this week, while some small magnetic material companies reported that their orders did not improve significantly,” Shanghai Metals Market analysts said.
“At present, many rare earth metal factories have expressed that the spot supply of rare earth oxides is relatively tight. Some rare earth metal factories even suspended their quotations.”
There are other reasons for Lynas’ recent struggles. It has copped a major hit to output at its Malaysian downstream processing plant due to water supply issues.
As with most EV related industries, weak short term demand in China shouldn’t cloud the broader picture, with Wood Mackenzie suggesting demand for rare earths for magnets will increase 70% by 2030.
Alistair Stephens, head of rare earths explorer Lindian Resources (ASX:LIN), told Stockhead’s Reuben Adams last week more around 45,000t of new NdPr would be needed for EVs by 2030.
That’s 10 repeats of Arafura’s (ASX:ARU) upcoming Nolans mine.
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