China maybe the biggest producer of rare earths but importantly, it is the biggest market by far.
The market outside China is still pretty limited, not big enough even to consume all of Lynas's output.
As a result, Lynas currently sells around a third of it's product into China.
Tariffs on Chinese products would likely crimp their sales and so China's RE consumption would shrink, so too, it's demand of RE.
Lynas may not be able to sell as much in China. Lynas doesn't sell much into the US, if at all anyhow so they aren't going to take up the slack.
More importantly, if China restricts exports of RE, which would include HRE, that would be devastating.
At this point there are no heavy rare earths produced outside China.
RE magnets in electric vehicles and wind turbines need those HRE to operate at high temperatures. That's the biggest segment of the market.
If China restricted supply of HRE, there is vastly reduced magnet making outside China and therefore much reduced demand for NdPr outside China.
Lynas would have a major problem.
Once Lynas starts producing HRE and in sufficient quantities, that would change, but the LAMP took three years to ramp up to nameplate capacity as I remember, so don't hold your breath.
LYC Price at posting:
$8.02 Sentiment: Hold Disclosure: Held
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