Sparkie1 - I think you may consider to take into account the still falling price of REE. The current basket prices is tad under $28. REE have been falling for 3 years now, albeit from a very high level.
Which way will they go next month, and thereafter. Truly, none of us knows. There may be increased demand for sure, but there will be large increases in supply with LYC and Moly production hitting the market over the next few months.
It is possible that the market has already priced in this extra supply, and therefore current prices maybe the bottom, but only time will tell.
If REE prices start an uptrend, then LYC could be rather profitable, but if they stay at $28 then that is not so good for the SP, and any further price destruction could be a serious matter for the profitability of LYC in the 2014 year.
Having said the above if contracts for supply can be obtained at near current prices or above for the full 22KT then LYC should be able to ride out the lower REE prices for a couple of years. Hopefully demand will take the REE prices higher by then.
LYC Price at posting:
55.0¢ Sentiment: None Disclosure: Not Held
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