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Has the market forgotten Lynas (LYC)?

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    Has the market forgotten Lynas (LYC)?

    Happy New Financial Year MM! On 27 June, Lynas Rare Earths announced that Lynas Malaysia is targeting first production of two separated Heavy Rare Earths (HRE) products in the 2025 calendar year. A new process will produce separated Dysprosium (Dy) and Terbium (Tb) at Lynas Malaysia for the first time and will complement Lynas’ existing Light Rare Earths product range. This is in effect an expansion of Lynas' addressable market, but the sharemarket seems to have ignored the news. Lynas has demonstrated discipline and good operational management, so I would have thought this announcement should have been received more warmly. What am I missing? Thanks, Angela

    Answer

    Hi Angela,

    The simple answer is yes, its drifted into the too hard basket in a very similar fashion to lithium, as the NdPr price has been under pressure due to a weak Chinese economy and what seems like their intent to curtail non-domestic producers – our discussion of this as it related to Iluka (ILU) here is worth reviewing, before we cut the position.  The China real estate crisis has failed to recover after a few false dawns and until confidence return to China, LYC is unlikely to turn although we believe market is approaching the nadir of the cycle.

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    Lynas Rare Earths Ltd (LYC)
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