Lynas laments US-China trade tension as prices flatten

Lynas' Mt Weld mining pit. Image: Lynas Corp.

Lynas’ neodymium and praseodymium (NdPr) prices remained flat during the September quarter due to continuing trade tensions between China and the United States.

The average selling price of NdPr, dropped to $18.5 per kilogram, compared with $20.1 per kilogram during the June quarter.

China controls 80 per cent of the world’s rare earth supply. Last year, the United States banned the purchase of rare earth magnets for military use from China, causing tension between the two nations.

“Continued difficult global economic conditions, particularly in China weighed on rare earth market prices during the September quarter,” Lynas chief executive officer Amanda Lacaze stated.

“We expect this situation to improve once US-China trade tensions ease, with prices expected to better reflect the future demand growth already being observed in Japan.”

While the tension between the United States and China regarding NdPr isn’t helping prices, it is leading to greater interest in rare earths from other countries.

Lynas anticipates a strong growth forecast in the Japanese magnet market, after prioritising NdPr sales to strategic customers in Japan during the September quarter.

“Outside China, demand for NdPr continued to grow and all NdPr was reserved for our strategic customers,” Lacaze said.

“Sales revenue was strong at $99.1 million, despite the volatile market conditions and sales receipts were at $96 million for the quarter.”

This quarter, Lynas announced its intention to build a heavy rare earth separation facility, which would be the first of its kind outside China.

“This reflects increasing customer interest, as heavy rare earths are critical elements to secure automotive electrification,” Lacaze said.

“Our strategic objective beyond securing long-term contracts is to stimulate further development of downstream industry in the USA and Europe, in magnet making and motor manufacturing.”

Lynas’ highlight for September was its safety achievements, accomplishing a company-wide zero lost time injuries for the quarter, and Lynas Malaysia reaching one-year lost time injury free on July 16.

NdPr is critical to the production of permanent magnets used in electric vehicles and wind turbines.

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