Insights

The Lynas (ASX:LYC) share price is down 10% in a month. Here’s why

The rare earths producer has had a terrible run the last 30 days.
The post The Lynas (ASX:LYC) share price is down 10% in a month. Here’s why appeared first on The Motley Fool Australia. –

The Lynas Rare Earths Ltd (ASX: LYC) share price is having a month to forget.

At the time of writing, shares in the Malaysia-based rare earth elements (REE) miner are trading for $6.31 – down 2.02%. Over the course of the month, it’s been even worse for Lynas – losing 9.84% in value.

While the company hasn’t released any price-sensitive news to the market since August, something has clearly spooked investors.

Let’s take a closer look.

What’s going on with Lynas?

The first point to make is that the entire market is down. While the Lynas share price has fallen nearly 10%, the S&P/ASX 200 Index (ASX: XJO) has fallen 4.49%.

It’s the steepest monthly fall the market has seen since last year. Of course, that was due to the panic caused by the worldwide COVID-19 pandemic.

The mining sector has been hit especially hard during this time. For example, the BHP Group Ltd (ASX: BHP) share price has fallen nearly 14% and the Fortescue Metals Group Limited (ASX: FMG) share price has collapsed by more than 24%.

As The Motley Fool has previously reported, iron ore prices have taken a beating. China is set on an ambitious path to reduce its greenhouse gas emissions. This has resulted in a clampdown on domestic steel production and a shift away from iron ore in favour of low-emissions steel scrap.

According to S&P Global, “A few mill sources expected China’s steel output cuts to widen further in late-September or October, mainly as the overall cuts by mid-September have remained insufficient to keep the country’s 2021 crude steel output within 2020 levels.”

While Lynas does not mine the metal, companies within any one industry sector tend to move together on the ASX.

What could be affecting the Lynas share price specifically?

As one of my colleagues has previously brought to our readers’ attention: Lynas is a price taker. The Lynas share price tends to move with the price of REE.

Recent geopolitical tensions between the US and China appear to have spilled over to the broader ASX resources space, including the rare earths markets.

This is in addition to China placing restrictions on its domestic resource producers in 2021 to curb production rates. It is estimated that anywhere between 70% and 80% of the world’s REE deposits are in the People’s Republic.

Lynas share price snapshot

Over the past 12 months, the Lynas share price has risen an incredible 141%. Year-to-date, it is up a still impressive 50.2%. Its 52-week high is $8.05 per share and its 52-week low is $2.45 per share.

Lynas Rare Earths has a market capitalisation of approximately $5.7 billion.

The post The Lynas (ASX:LYC) share price is down 10% in a month. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Lynas right now?

Before you consider Lynas, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lynas wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why is the Lynas (ASX:LYC) share price so volatile?
These were the worst performers on the ASX 200 last week

It’s been a terrible week for the Lynas (ASX:LYC) share price. Here’s why
Why the Lynas (ASX:LYC)share price is sliding 12% on Monday
Why the Lynas (ASX:LYC) share price is up 86% in 2021

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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!