Record rare earth prices lift Lynas revenue 55 per cent

Lynas Rare Earths lifted quarterly revenue 55 per cent on record prices as Western buyers paid above market rates to secure supply from outside China, the world's largest rare earths producer outside China said on Thursday.^[1]

Gross sales revenue rose to $310.1 million in the three months to 30 September from $200.2 million a year earlier. Lynas's average selling price rose 88 per cent to a record $102.10 a kilogram, more than offsetting a 17.7 per cent fall in sales volumes of rare earth oxides.^[1]

Prices set by contract, not by China

Floor-price agreements, which guarantee a minimum price regardless of where Chinese-dominated markets trade, now cover more than half of Lynas's production.^[1] "The floors cushion Lynas against Chinese price swings and reduce earnings volatility," said David Tuckwell, chief investment officer at ETF Shares.^[1]

The result still fell 18.2 per cent short of a Visible Alpha consensus estimate cited by Reuters, but the market looked through it. Lynas shares rose 4.2 per cent, their highest close since 7 October.^[1]

Shutdowns ahead

Production will dip this quarter. Lynas said its Malaysian processing plant will shut for a month of scheduled maintenance in the December quarter, and its Kalgoorlie facility will close for two weeks during electricity network upgrades.^[1] Total rare earth oxide production rose 6.5 per cent to 4,254 tonnes in the September quarter, while output of NdPr, the material used in permanent magnets for electric vehicles and wind turbines, was broadly steady.^[1]

Mr Tuckwell said that with the price problem largely resolved, results now depend more on whether Lynas can deliver and keep production steady through disruptions. The company is still searching for a permanent chief executive after Amanda Lacaze left in June.^[1]