$4 club, page-2

Lynas' share price has just been following rare earth prices. Currently the rate of decline for light rare earths and neodymium has really slowed and so we haven't seen the share price make any serious drops in the past few days.

Even for the Chinese the current prices of light rare earths is too low, I seriously doubt that even the smugglers can make much profit out of their trade. Common sense tells me that bribery and illegal activities are expensive. The Chinese created the rare earth bubble by nonsensical quotas and from that smugglers entered the scene and were having a great time while the rare earth prices were up in the sky, but now it's just all too difficult for everyone so it's no surprise that their government has realized that they need to clean up their act and put a floor to rare earth prices, which is exactly what they've started to do. I personally believe that we will see most smuggling activity come to an end by the end of this year.

At the moment, I'm very optimistic about Lynas. There is still a real possibility that in the short term the share price will decline to a low 30c or lower because the rare earth index still shows a clear downwards trend (have a look at metal pages or the REMX index), but I am expecting that trend to reverse before the years end. That's my opinion.

I think it will be a few years yet (2017 is my guess) before Lynas hits $4.