Why did Lynas (LYC) get crunched this week?
Hello guys - just wondering if you know what is driving the sell off of Lynas' shares today (2 Mar). It started at ~2pm. Thanks
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Answer
Hi Angela,
The rare earths market has been volatile this week on the back of Tesla (TLSA US) announcing plans to install permanent magnets in their cars to reduce the reliance on the expensive materials. Very little detail was provided on the plans and we think there is a lot of work to get through before this becomes a reality – plus Tesla, and EVs in general, are just one of many demand sources of rare earth materials.
We continue to like Lynas, the biggest player in the space outside of China. They have government support in place in both Australia & the US and while there are some risks around execution with the new Kalgoorlie plant, we think the market is taking a harsher view than what the company will deliver.
