Traders are clearly seeing Lynas Rare Earths (ASX:LYC) as one of the biggest winners from China’s export restrictions on several key rare earth materials, with the Australian miner jumping as much as 10% in price today.
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This solid Thursday hike brings Lynas Rare Earths up to as much as 37% up YTD.
It’s not overly surprising that some traders are taking a look at Lynas – with China throttling rare earths exports since Donald Trump and the U.S. levied tariffs on Beijing, global car makers have been looking for other (cheaper) options.
It’s gotten bad enough in Europe, according to Reuters, that some auto parts plants on the continent have started suspending work as they look for new avenues.
This all puts little old Lynas in the hot seat; it’s one of the only companies, listed or otherwise, outside China still producing the required materials. China currently commands as much as 90% of production in the sector.
“Lynas is uniquely positioned to contribute to and benefit from efforts to diversify and rebuild supply chains, including opportunities for a sustained market restructure,” Lynas CEO Amanda Lacaze said last month.
Good timing too – Lynas just managed to produce the first dysprosium oxide at its Malaysian plant in May. That too would be encouraging buyers.
Also coming up are deals in Japan, Europe, and the U.S., Lacaze recently said.
Things may still swing the other way should the European Union sort things out with China, and that is underway: Trade Commissioner Marcos Sefcovic has been looking to speak to his Chinese counterpart to “clarify the situation.”
Whether they sort things out, though, Mr Sefcovic still declared “the export [bans] increase our will to diversify” – and even just that may have made Lynas’ ears prick up.
Today, LYC is up as much as 81 cents higher, to sell at $9.04/sh.
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