I personaly feel there was no June guidence. I know they said 250 T would be reserved for Key customers. I took this to mean they were selling everything and they were going to absorbe a little pain to protect their best customers. The reality is that much more than 250 is in the ware house. that production was limited 6000 lbs yearly of NDPR product that is 83% of 7200. I listened and read twice. I see nothing that makes me believe we should see higher production next Q. It may happen but I do not hink that is the plan. That is a major reduction. I hope AL is not going back to the tactics that she used when she first took over where every Q we heard they were cash flow positive excluding x,y, and or Z
. What is your oppinion i thought she showed allot of stress when she was telling us that this was good. My computer also showed some of the highest stress levels I have ever seen for her.
What will put autos and appliances (another big user but it is so segmented it does not show up on charts, too hard to evaluate.) is time and confidence in the economy. The economy was booming a few years ago. now it has slowed down in most of the world. Around my area almost every driveway has a least one car that is less than 3 years old. The US economy is still going strong but there are many reports it may be slowing. So a few people are showing caution, Many are not. The TW may be a small part of it but it started midway through 2018. First clear indication was the discounting ( in US) that went on at end of year. this year is even bigger. Yes the TW adds to it but I believe that it is just part of this economic cycle and does not have to be blamed on any one thing. It is JMO but a small slow down may actually speed up the rebound.. either way all those cars bought in 2016 and 2017 have to age a little and people have to have a little more faith in the future. Then cars will rebound. This is just a cycle one that has occured many times before. and every down cycle has a up cycle. I really missed calling this one I was too early and so far it is milder than I expected. I sharp increase in gas prices would help to. Sales have been big vehilcles gas going up would encorage a few people to down size this would help.
As far as decrease in Chinna sales I understand your point. I just do not see it as significant as you. It is a global economy. Lynas sells less to china, China sell less to the ROW and lynas sells more. There are end user and there are producers. What counts is demand and supply. The paths of how product moves from one to the other varies and somtimes is long and complex. When it changes does it make much difference? It will make a big difference to Japan. They will recapture more of the small motor and other products that China stole 10 years ago. but for core suppliers and end users not much difference. I still feel and I believe AL agrees that what the REE industry needs is at least 2 companies the size of Lynas to be started in other countries. The confidence this will give end users will cause REO demand to grow rapidly. It will take these commpanies years to get going. It will take demand years to ramp. Overall Lynas will do better with compition. Stock will go up when investors see firm new demand developing. Right now the bigest signal I have is Lynas limiting production. Regardless of path demand is down and Lynas cannot sell all they can make.
I have talked allot about the actual GDP of chinna wondering if it is growing at the official 6% number or somthing far less. barons and economist using shipping, International money transfers Tax reports both feel it is much less 2% to 4%. I saw a new methode. it is measuring indutriel heat and night time visable light from satalites. Light indicates activity on late shifts. This methode says 2 % to 3%. China was a significant help for the recovery after the banking crisis. There cash reserves are much smaller now and internal debt much higher. If the economy is much less robust than they are claiming then they cannot help as much this time. EU has no slack at all. Overall this makes for a much higher risk. I think that is why the US Fed is acting so quickly. i am assuming they will lower rates in a few hours.
LYC Price at posting:
$2.55 Sentiment: Sell Disclosure: Not Held
