LYC 2.89% $5.69 lynas rare earths limited

That very simply gets back to economic value per individual REE,...

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    That very simply gets back to economic value per individual REE, something that has been radically distorted since 2009, and to a large degree masked shifting values/demand across end market segments.

    Av NdPr prices 2009 $13.50kg/Dy $99kg vs phosphors suite, Eu $403kg.

    Larry Nitz, head of Hybrid and Electric Powertrain Engineering for GM sums it well, remembering 2016 Volt would have been signed off late 2014:

    "We can’t really control the price of these REs, and I’m not sure they’re really market-priced anyway because they’re largely controlled by a Chinese monopoly. So we wanted to reduce the amount of dependency. There are two different kinds of REs. There is the lighter kind we use in consumer goods like ear buds and a lot of other devices. They work great. They have great magnetic characteristics, but they don’t operate very well at higher temperatures like those seen in automobiles. Then we have the heavier REs, like dysprosium. It’s very expensive and it has better temperature characteristics.

    Our objective in the gen-2 Volt was to become less dependent, especially on the heavier REs that can only be commercially found in China. So we use a mix of the light and heavy, reducing the amount of heavy REs (such as dysprosium and terbium) by 80% – using only one-fifth the amount – and a 50% reduction overall in the lighter rare earths such as neodymium and praseodymium."

    IMO LRE have way undershot their economic value, hence ROW demand growth 25% YoY, and HRE still to be determined. Effectively it all comes back to China managing supply/demand back into balance without further market shocks, with some confidence that domestically they have unwound most of the overproduction spilling form 2014 into 2015 reduced demand.

    Long saga, but personally I believe there is more clarity ATM than any time since late 2010, requires definitive Chinese action to verify it. Hopefully we'll see adjusted H1 production quotas, with restructured taxes & further consolidation, post Spring Festival.

    Only then will REE start to reflect true economic values.
 
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