Lynas Operating License: Potential Game Changer for Rare Earths Market?

Potential negative effect on market

“The entrance of Lynas and Molycorp into production is likely to lead to a global surplus for most light rare-earth elements and we believe it is likely prices will continue to weaken over the near term, with very limited engagement currently from buyers,” said UBS analyst Ben Wilson in comments to The Wall Street Journal.

After averaging $25/kg in the second quarter of this year, Deutsche Bank expects lanthanum to decline to $11/kg from 2013 — a monumental fall from the record high of $74/kg recorded only last year. Despite this drop, the company’s chief executive has tried to counter investor concerns by noting that current levels are “still a terrific price” for the company considering that three years ago lanthanum sold for only $7/kg.