EDITOR: | June 12th, 2013 | 5 Comments

Lynas announces minimum rare earth price schedule

| June 12, 2013 | 5 Comments
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June 12, 2013 (Source: MYsinchew) — Lynas Corporation will implement a minimum price schedule for its rare earths (REO) products effective July 1.

In announcing this, Chief Executive Officer Eric Noyrez said the company believed that only prices which were sustainable for producers and customers would allow the REO market to grow to its full potential over the long-term.

“It is our responsibility as a REO producer to invest in the necessary environmental protection measures and encourage the development of sustainable practices that are safe for people, safe for the environment and secure for customers,” he said in a statement today.

The company said the REO market had the potential to grow between five and six per cent annually over the medium-term.

This growth is expected to come from key sectors such as permanent magnets, automotive catalytic converters and fluid cracking catalysts, it said.

However, these long-term growth rates required long-term pricing visibility to justify investment by customers and producers, the company said.

Media reports had said recently that major industry participants in China acknowledged that recent REO price falls were not sustainable.

“Should this trend continue, the industry risks losing production and triggering a similar supply crisis to that of 2010 – 2011 when prices were driven up sharply to peak levels above US$100/kg, destroying demand in many market sectors,” Lynas said.

Currently, the aggregate selling price of typical light rare earths is about US$16 to US$20 per kilogramme, around 25 per cent below the minimum sustainable level for producers.

Apart from that, the company also announced that the cracking and leaching unit of the Lynas Advanced Material Plant in Malaysia (LAMP) achieved 100 per cent of its 11,000 tonnes per annum Phase 1 nameplate production capacity.

It said production rates in the separation and product finishing units would be determined according to the rate of product approval by customers and market demand.


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Comments

  • Veritas Bob

    What are the prices in the minimum price schedule? Where are they in comparison to current prices?

    Is this a possible cover for inability to produce at the stated (Phase 1) nameplate capacity?

    June 12, 2013 - 1:54 PM

  • REEality

    Moly and Lynas constructed financial models on bubble pricing. China is letting all of the air out of the bubble via ‘black market sales’ of REEs. At the same time China just increased official REE production capacity to 320,000 tpy. Wake up — this was a Chinese trap.

    June 13, 2013 - 12:44 PM

    • Jan Johnson

      Lynas got approval and financing for its business plan well before the RE price bubble.

      June 13, 2013 - 10:01 PM

    • Tracy Weslosky

      China increased production because we perceive there to be a rising demand. I will deal with this topic in my REE Week-in-Review. Let me add, China will need to sooner than later import REEs, and let’s consider LYNAS….

      LYNAS has a processing facility in Malaysia — a country that has invested a great deal in becoming a world player in evolving technologies. My theory is that LYNAS will have ample demand just in Malaysia in the future, and the Malaysians had the vision of ‘supply of demand’ to understand this.

      Consider.

      June 16, 2013 - 10:57 AM

  • China’s rare earth monopoly and its impact on U.S. National Defense | InvestorIntel

    […] Yet, Lynas’ unitary production costs seem higher than Molycorp’s, considering the former’s Price Schedule Announcement (June 12, 2013) and Molycorp’s 3rd quarter financial press release (November 7, […]

    January 29, 2014 - 7:43 PM

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