They raise quotas again and this time instead of about 6 months apart only 3 months. This is "Tricks" by China I cannot disagree. I would prefer to see it as calculated manipulation. Helps me to take it very seriously which is critical for investing. The size of this change is small compared to the first two this year which were large. Timing makes it very important. The only conclusions I can draw is China is very happy with current prices and wants them the same or lower over the next 6 to 12 months. This will mean Lynas will have little chance of increasing profits to support even a $6.00 SP by traditional metrics.
Both Lynas and MP have said China is losing money at these prices. I do not have data to argue this at all. What I will say is that China is happy with these prices and do not want to see them go up. You decide what that will do to LYC SP.
Please note this increase is bigger than Lynas's C2023 total production. "The new allowances take the 2023 total rare earth mining quota to 255,000 tons, and the total smelting and separation quota to 243,850 tons, up 21.4 per cent and 20.7 per cent respectively from a year before, versus year-on-year rises of 25 per cent and 24.7 per cent in 2022."
LYC Price at posting:
$6.80 Sentiment: Sell Disclosure: Not Held
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