Lynas Corp Feels Heat as Rare Earths Price Index Plunges to All-Time Low

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Well, as we’ve written before, we’re seeing the bottom, folks.

Rare earths metal and oxide prices on MetalMiner‘s monthly index have fallen, again, this time enough to notch the lowest REE index value of all time (since we began tracking the rare earths market with the Monthly MMI® in January 2012). The monthly Rare Earths MMI® registered a value of 28 in July, a decrease of 9.7 percent from 31 in June.

Rare-Earths_Chart_July-2014_FNL

Compare with last month’s trends – here’s our free June MMI® Report.

“For every analyst” – or junior mining firm – “citing the lowering of tariffs as a reason to be bullish on rare earths such as neodymium oxide and terbium, there should be two or three citing waning demand, the continued poor performance of domestic rare earths mining companies such as Molycorp and the general ambiguity of news coming out of China,” wrote MetalMiner Assistant Editor Jeff Yoders recently.

Jeff was responding to yet another glowing press release from the likes of Texas Rare Earth Resources Corp., one of many non-Chinese mining firms looking to make their case for profitable rare earths production. Which brings us to some recent commentary by Jack Lifton, one of the industry’s most visible analysts.

“There’s a whole lot going on in the non-Chinese rare earth sector that has nothing to do with the mining operations at Mountain Pass [Molycorp] or Mt Weld [Lynas Corp.],” Jack writes. “I think that the non-Chinese world is on the cusp of putting into place the right ideas to process the right amounts of rare earths from right-sized and right-proportioned rare earth deposits.”

Of course Jack would say that – he’s a non-executive director for Texas Rare Earth Resources Corp.

The biggest issue is that the light REE market is still oversupplied, and demand is not rising enough to make prices follow. Lifton does say so outright: “The fact is that today the world supply of the light rare earths that are the only products of the mining operations of both Molycorp and Lynas is in surplus.” (Indeed, reconciling the supply surplus and profitability is only one of Lynas Corp’s challenges; the most intriguing one being, as Lifton mentions, dealing with the Malaysian public’s perspective of having a female CEO.)

He continues, “The Chinese company, Baotou, has said publicly that by itself it could supply the entire global demand for light rare earths indefinitely. Of course it would ONLY continue to be able to do so if it remains the lowest cost producer…”

Of the latter, signs still point to Yes.

Key Price Drivers

A 13.7 percent drop over the past month left yttria at $7,092 per metric ton. Europium oxide prices dropped by 12.5 percent this month to $564.11 per kilogram. A 9.3 percent decline for dysprosium oxide left the price at CNY 1,460 ($235.31) per kilogram.

Following a 6.5 percent decline in price, terbium metal finished the month at $693.04 per kilogram. At $483.52 per kilogram, terbium oxide was down 6.2 percent for the month. The price of praseodymium neodymium oxide fell 6.2 percent to $49,158 per metric ton. Cerium oxide prices fell 4.9 percent to $3,143 per metric ton.

After falling 4.7 percent, neodymium oxide finished the month at $49,158 per metric ton. The price of yttrium closed the month at $45.13 per kilogram after dropping 3.4 percent. Lanthanum oxide closed the month at $3,062 per metric ton after dropping 2.6 percent. At $65,275 per metric ton, neodymium was down 2.4 percent for the month.

At a price of $4,029 per metric ton, rare earth carbonate did not budge the entire month. Last month was consistent for praseodymium oxide, which did not move from $93,480 per metric ton. Prices for samarium oxide remained constant this past month, holding at around $2,982 per metric ton.

The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a unique view into rare earth metal price trends over a 30-day period. For more information on the Rare Earths MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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