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Why is the Lynas (ASX:LYC) share price storming higher today?

Why are Lynas shares storming higher today?
The post Why is the Lynas (ASX:LYC) share price storming higher today? appeared first on The Motley Fool Australia. –

Today has been a pretty interesting day for ASX shares so far. The S&P/ASX 200 Index (ASX: XJO) is currently 0.07% in the green so far this Wednesday after spending most of the day in the red. That makes the movements of the Lynas Rare Earths Ltd (ASX: LYC) share price even more noteworthy.

Lynas shares are currently up a healthy 3.27% at $9.31 each, defying the gloom of the broader market. This latest move brings Lynas one day closer to finishing the 2021 calendar year on a high.

This is a company that has managed to give investors a gain of more than 122% year to date so far this year. Lynas is also up more than 140% over the past 12 months.

So what’s behind today’s share price gains?

What’s behind the Lynas share price surge today?

Well, unfortunately, it’s not quite clear. There has been no official news or announcements out of Lynas today. Or indeed since 13 December.

However, we do have some second-hand news. As my Fool colleague James covered this morning, analysts at 麦格里银行 (ASX: MQG) have just released analysis that argues Australia’s top lithium miners are sitting in a powerful lithium-fuelled tailwind.

Macquarie reckons “electric vehicle adoption could keep lithium prices at record levels for four years”. As such, it has named a bevvy of ASX lithium shares that it expects will benefit from this tailwind. These included Pilbara Minerals Ltd (ASX: PLS), Allkem Ltd (ASX: AKE) and Mineral Resources Ltd (ASX: MIN).

Now, Lynas is not a lithium company. It is in the business of processing rare earth minerals (as its name suggests). These mostly include neodymium, lanthanum and cerium. So why might this be relevant to the Lynas share price?

Well, rare earths are also a major component of the lithium electric batteries that power zero-emission vehicles. Neodymium, for instance, is often used in high-power electromagnets that are often found in electric motors.

So perhaps investors have taken note of this report, and have rewarded Lynas shares accordingly. That might explain why the share prices of Pilbara, Mineral Resources, and Allkem are all in the green today. Pilbara, in fact, is currently up more than 7%.

At the current Lynas Rare Earths share price, this company has a market capitalisation of $8.38 billion.

The post Why is the Lynas (ASX:LYC) share price storming higher today? appeared first on The Motley Fool Australia.

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

Before you consider Lynas Rare Earths, 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 Rare Earths 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

What is the outlook for the Lynas (ASX:LYC) share price in 2022?

Up 27% in a month, the Lynas (ASX:LYC) share price just hit another 9-year high. Here’s why

Here’s how EV mania is supercharging growth for Lynas (ASX:LYC)

These were the best performing ASX 200 shares last week

5 best ASX 200 resource shares to hold in November

Motley Fool contributor Sebastian Bowen 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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