LYSDY - Lynas Rare Earths: The Storm Is Not Over Yet
2024-04-27 09:32:46 ET
Summary
- Lynas Rare Earths reported disappointing Q3 FY 2024 results, with revenues falling 58.3% YoY and sales volumes declining 53% YoY.
- Rare earth prices, including NdPr oxide, Dysprosium, and Terbium, continue to decline, causing challenges for the company.
- Lynas is maintaining inventories and raising the capital budget for its Kalgoorlie project, but construction activities for its Mt Weld Expansion Project and U.S. processing plant are progressing as planned.
- Rare Earth prices could rebound mainly due to weaker production growth from China.
Back in March 2023, I published an article on Australian rare earth miner Lynas Rare Earths Ltd (OTCPK: LYSCF)(ASX:LYC). Back then, Lynas’ shares were being raked over the coals after Tesla Inc. (NASDAQ: TSLA ) announced plans to open a $5 billion gigafactory in Mexico and, among other things, redesign its PM motor to exclude rare earths. I pointed out that Tesla’s move would only have a minor effect on the NdFeB market, limited to not more than 3% of Lynas’ revenue even if Tesla was to eliminate NdFeB motors across its entire fleet. However, in that piece, I did not address the much bigger elephant in the room: the ongoing rare earths price crash. Lynas shares have tumbled 16.6% since that publication....
Lynas Rare Earths: The Storm Is Not Over, Yet