fundamentals , page-26

Good point Jan but the major growth in REO demand is projected in magnets with the main feedstock Nd but it's not going to come under a lot of pricing pressure any time soon. Check out Baotou's suite & stockpile. Dy is the kicker (but relatively small out of CLD) with comments that the shortage will slow magnet growth - impacting Nd & Pr.
The balance of CREO (excepting Y) are relatively tiny markets with demand tied to GDP growth and in particular low energy lighting take up v growth in LED. Y is over rated IMHO and there's little out of CLD anyway.

Maybe conservative but the major advantage of the CLD suite near term is it should hold the Lynas basket circa $40 versus Moly circa $28 with 83% exposure to Ce/La. Look to Lynas to value add (control their business) thru other means than price dependency.

Opinions re your points:

- stockpiled inventory used up (esp Japan) - Also large stockpiles sitting at the traders/hoarders (the ones that caused the bubble prices) that need to be worked thru, plus China needs to get smuggling under control.
- demand destruction progressively reversed when secure ex-China supply is available - Forecasted to take up to two more years for demand to fully return to pre bubble prices. Varies by element & industry but no quick fix. Japan is forecast to consume only 27kt REO in 2015 v 33kt in 2010, mainly due to polishing demand being smashed by multiple use.
- oversupply and weak prices for Ce/La/Sa and - Definitely, see above.
- strength in the CREE prices. Probably Dy and the balance should hold or perhaps appreciate slowly.

Look to Lynas's off take agreements and value add opportunities. Other examples mentioned elsewhere but look at Petronas, Lynas have done a deal to take their gas supply via a dedicated spur off a Petronas trunk line, Petronas as the largest oil & gas producer in the region need La/Ce as Fluid Cracking Catalysts. Who they gunna turn to? Regular, consistent quality delivery, LT contract,just around the corner, mutual customer/supplier partnership, can't tell me a beneficial deal hasn't been cut there for both parties. Most likely Petronas previously dealt with several third party traders out of China on a month to month basis at the mercy of quality/price variations - how happy do you think they are going to be? Ditto BASF etc, etc.

Lot more to Lynas than a simple basket price number.