Get Lynas Corp a Security Blanket: Rare Earths Price Index Hits New Low

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The monthly Rare Earths MMI® drifted downward yet again, making the trend-line look like the pursed mouth-line of a very uncertain investor.

Rare-Earths_Chart_August-2014_FNL

Rare-Earths_Chart_August-2014_FNL_sadface

(I mean, right?)

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

For buyers, of course, this isn’t entirely bad news. However, the facts that US demand for rare earths such as cerium oxide has waned (more on that below) and that substitutes are being more commonly used, all makes us wonder if the rare earths price bubble – now that it has burst – is permanently damaged.

This Lynas Needs a Security Blanket Too

As MetalMiner has reported multiple times before, the light rare earths sector especially is now drastically oversupplied. This is killing the newbie operations of Western producers Molycorp and Lynas. Just the other day, we came across even more commentary on Lynas Corp’s terrible state, in price terms:

As a result of China’s significant influence on the rare earths market, Lynas has seen its average rare earths ‘basket sales price’ fall from above US$200 per kilogram in 2012 to US$18.25 per kilogram. This is down from US$22.63 per kilogram last quarter.

And another Forbes article highlights the cyclical nature of the rare earths beast:

The joy here is that it was precisely that upward drive of prices that allowed both Molycorp and Lynas to actually finance their expansion plans. It’s seriously unlikely that they would have gained the capital that they needed without China having attempted to manipulate the market. And now that they have been able to finance production China’s monopoly has been broken and those monopoly profits, those economic profits, have gone again.

North American Cerium Oxide Demand Down

Meanwhile, Asian Metal hints at lower demand for this particular LREE. “Sources reported further weakness in the market as August begins with little change in demand from the glass polishing, ceramics, and phosphor powder markets,” according to that publication. “Downstream users continue to draw on replacement materials, and the oversupplied nature of the spot market has discouraged consumers from volumes in excess of their minimal needs.”

This Month’s Rare Earth Prices

* Get the complete prices every day on the MetalMiner IndX℠

The price of europium oxide closed the month at $502.13 per kilogram after dropping 11.4 percent. After falling 7.7 percent, cerium oxide finished the month at $2,916 per metric ton. At $453.54 per kilogram, terbium oxide was down 6.7 percent for the month. Lanthanum oxide prices dropped by 5.3 percent this month to $2,916 per metric ton. A 4.5 percent drop over the past month left yttria at $6,803 per metric ton. The price of neodymium fell 3.7 percent to $63,172 per metric ton. Terbium metal prices decreased by 2.3 percent this month, ending at $680.31 per kilogram. At $48,594 per metric ton, neodymium oxide was down 1.6 percent for the month. The value of dysprosium oxide weakened by 0.7 percent this month, settling at $234.87 per kilogram.

The price of praseodymium neodymium oxide held steady around $49,404 per metric ton last month. Samarium oxide held pat last month at $2,997 per metric ton. At a price of $93,948 per metric ton, praseodymium oxide did not budge the entire month. Hovering around $4,049 per metric ton for the month, rare earth carbonate remained unchanged. Yttrium experienced a flat month, staying around $45.35 per kilogram.

Don’t forget to read July 2014 MMI analysis before August’s full report comes out next week!

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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