Insights

The Lynas (ASX:LYC) share price is bouncing back, what’s next?

The Lynas Rare Earths Ltd (ASX: LYC) share price is up almost 15% in 7 sessions. What’s next for the leading rare earths producer?
The post The Lynas (ASX:LYC) share price is bouncing back, what’s next? appeared first on The Motley Fool Australia. –

asx share price increase represented by golden dollar sign rocketing out from white domes of lithium

March proved to be a volatile month for the Lynas Rare Earths Ltd (ASX: LYC) share price.

Its shares surged as much as 20% in the first week to an all-time record high of $6.82. This was followed by a sharp sell-off between 23 and 25 March where its shares shed ~15% to a 1-month low of $5.56. 

In the final stretch of March, the Lynas share price staged a 10% recovery to finish the month relatively flat. 

What’s next for the Lynas share price? 

Higher neodymium prices to lift earnings 

Neodymium (NdPr) is the primary material produced by Lynas, typically used in the production of magnets for automotive and energy industries. 

A global commitment for reducing emissions has put the critical material in the spotlight, propping both NdPr prices and the Lynas share price to 9-year highs. 

In Lynas’ half-year results, the company acknowledges that it is still premature to make a full assessment of global demand for rare earths, but preliminary data is positive nonetheless. It pointed to accelerating electric car penetration in Europe and Asia (primarily China) which more than compensates for the overall year-on-year decrease in global car sales.

Preliminary estimates highlight 40% growth in global sales of electric vehicles in 2020 compared to 2019, reaching a market share of approximately 4%. Other notable sectors include wind energy capacity which grew by 8% despite COVID-19 disruptions. 

Solid demand has seen the average Chinese domestic price of NdPr increase to US$55.5/kg in December 2020, compared to the US$35.9/kg in December 2019. This translated to a net profit of $40.6 million in 1H21 compared to the $3.9 million in 1H20.

Lynas 2025 growth plan 

The ‘Lynas 2025’ growth plan is focused on building a larger business to meet forecast demand growth. 

Lynas announced a $425 million capital raising back in August 2020 to fund its Kalgoorlie rare earths processing facility to produce mixed rare earth carbonate for shipment to the Lynas Malaysia plant.

In January 2021, the company signed an agreement with the United States government to build a commercial Light Rare Earths separation plant in the US, with the US government to provide up to approximately US$30 million. 

Once operational, the plant is expected to produce approximately 5,000 tonnes per annum of rare earths products, including approximately 1,250 tonnes per annum of NdPr. The plant will be designed to receive material directly from the new Kalgoorlie plant in Western Australia. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Kerry Sun owns shares of Lynas Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Lynas (ASX:LYC) share price is bouncing back, what’s next? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!