"Middle supply chain is Lynas's target market and it's fortunes are largely tied to how quickly it can be rebuilt ROW. Rising USD is probably a good indicator of fertile ground."
Aushed, I am quietly confident because Lynas always have an Ace up it sleeve which is China, if Customers wants to play funny buggers and think quarterly to quarterly, Lynas can always walk away from the table and sell their rare earth to China. The China government plans Long term (10 year plan) and will gladly take all of Lynas supply and conserve their own if need be. Lynas can always tell Japan, look we have given you first preference for our rare earth but if don;t want to look after us, we will give it to China and if China gets a chance to steal more of Japan's supply of REE, they will. We are not naive, we all know China just doesn't like Japan fullstop. China definitely will be interested in Lynas rare earth supply because the government plans to build the largest Wind Farm in the world to provide the increasing energy needs of it growing population.
Lynas has now transformed their business strategy in terms that they now NOT ONLY serve the rest of the world for rare earths but they now serve China also. Remember Lynas exist as a company to do business and make a profit for the shareholders. There is NO DOUBT Eric Noyrez is under tremendous pressure by institutional investors to perform. There is no doubt about that.
Do you know why after Lynas and the China government is working together to set a minimum floor price?
It's simply because at the current REE price, no one is making any money from the producer side of things. The government is slowly taking control of all the illegal chemical REE plants in China while at the same time WITHHOLDING the Rare Earth ore to these plant to ensure the illegal supplies of rare earth runs out.
When i say illegal let me clarify, these plants are "illegal" because the government deem these plants as environmentally non compliant (Nevermind the fact the Chinese President wants to control more of the REE supply for his personal interest). The government wants to shut down these plants and implement new technology to transform these old REE chemical factories to be more environmentally friendly and this is going to increase THEIR OWN cost of production by around $5 to $10 COP.
The citizens of China The rise of the middle class are becoming more and more educated and with that knowledge the people are becoming more environmentally conscious with regards to health and pollution. And with this awareness the government now are implementing environmental controls to all factories to ensure that everything is produced in a environmentally sustainable manner.
And with that i will leave you with an article of an event that happened not too lon ago:
Riot police were brought in to remove protesters from outside the solar panel factory in Haining City
A solar panel factory in eastern China has been shut down after protests by local residents over pollution fears.
Some 500 villagers staged a three-day protest following the death of large numbers of fish in a local river.
Some demonstrators broke into the plant in Zhejiang province, destroying offices and overturning company cars before being dispersed by riot police.
Tests on water samples showed high levels of fluoride, which can be toxic in high doses, officials said.
The BBC's Juliana Liu in Shanghai says the Chinese villagers see the plant's closure as a victory.
They accuse Jinko Solar, a Chinese company making solar panels for sale overseas, of dumping hazardous chemicals into the water supply, our correspondent says.
"We feel that it is socially responsible to close the factory first and to take corrective measures," company spokesman Thomas Jing told the BBC.
He said there had been accidental discharge into the surrounding area during a rainstorm at the end of August.
He said chemicals used at the factory had been stored in an open area rather than a warehouse, and that the covering had been ripped off during the unexpectedly harsh weather.
Mr Jing said the firm was investigating whether the fluoride was responsible for the death of the fish. A clean-up was also under way, he said.
The firm in Haining city is a subsidiary of a New York Exchange-listed Chinese solar company, JinkoSolar Holding Company.
Meanwhile, local government officials said there would be an overhaul of the production procedures at the plant involving the emission of waste gas and waste water.
"[We will] go all out to maintain stability and seriously deal with those who are suspected of violating laws in the incident in accordance with the law," Haining's city government said in a statement.
It also reported police had arrested a man for spreading "rumours" on the internet about cases of leukaemia and other cancers in local residents.
Chen Hongming, a deputy head of Haining's environmental protection bureau, was quoted by Chinese media as saying that the factory's waste disposal had failed pollution tests since April.
The environmental watchdog has warned the factory, but it had not effectively controlled the pollution, he added.
Government officials have been sent to the area to hear local residents' grievances, the China Daily reported.
This is the latest example of Chinese citizens being spurred to action over environmental worries. Last week, Shanghai halted production at two factories over worries about lead poisoning.
Last month, a chemical factory in the north-eastern city of Dalian was ordered to move after 12,000 residents took to the streets over pollution fears.
PS My posts are my thought process only and serve as NO RECOMMENDATION to buy Lynas shares.
LYC Price at posting:
37.5¢ Sentiment: LT Buy Disclosure: Held
(20min delay)