Jump to content

LYC - LYNAS RARE EARTHS LIMITED


ShareCafe

Recommended Posts

Hi Nightstalker, It is clear you are correct about the market swings about LYC and particularly the reasons for them i.e. JPM or some other big player clearly controlling the market sucking out the wealth of small players. What I wonder about is the degree to which, in the light of all this, TA actually is. It seems ATM this stock is for the foolhardy as the big traders have clearly identified the perfect plaything and participants remain at the mercy of the bloodsuckers.
Link to comment
Share on other sites

  • Replies 970
  • Created
  • Last Reply

Top Posters In This Topic

That last word of yours is the perfect descriptor, Kelpie ;)

 

Apart from the obvious profits that the big players are making by shoving the price north and south at their whim, with no changes to significant shareholdings (selling to themselves or each other??), there are only two choices with this stock:

 

- stay out of it altogether, or

 

- rely on the fundamentals and just ride out the volatility.

 

I'm basically a TA trader, but LYC is in my long term buy-and-accumulate portfolio, not my trading portfolio. So I'm simply resisting all the tree-shaking, knowing that the fundamentals are almost certainly (nothing is 100%) going to catch up, and the price will have to catch up to the true value, especially once they start producing. Then we'll probably see MORE than true value, with the fundamentals supporting a much better share price, plus the positive sentiment giving it the extra boost. But that may be 12 months away yet.

 

Trying to trade this one for short term swings is highly unpredictable on any TA. you could end up doing a lot of churning of parcels of stock, and by the time you take out all the brokerages etc, you may make a little bit or lose. Not worth doing, IMHO, while the big boys are playing with it. It can turn on a dime, as we've seen many times in the last 3 or 4 weeks.

Link to comment
Share on other sites

Merc - the prices are here:

 

http://www.metal-pages.com/metalprices/rareearths/

 

You need an account to see the actual prices, or you can do the free trial thing.

 

I don't have an account, but when one of the posters on another forum who DOES have an account posted the $74.50 price, I did the free trial, and he appears to be right. Although the LYC website does have a current basket price of $61.97. So I'm not sure just where the apparent discrepancy lies....

 

Another interesting look at this, based on basket prices averaged out through 2009, but this page was posted only a week or two ago, is here:

 

http://www.resourceinvestor.com/News/2010/...h-Projects.aspx

 

Mt Weld looks pretty darned good, doesn't it? ;)

Link to comment
Share on other sites

 

Japanese trading house forges rare earth procurement deal with Lynas

In the latest move by Japan to reduce reliance on China for its supplies of rare earths, the Australian miner has agreed to begin shipments to Sojitz from Q4 2011

 

Author: Yuko Inoue (Reuters)

Posted: Wednesday , 24 Nov 2010

google_protectAndRun("ads_core.google_render_ad", google_handleError, google_render_ad);

 

TOKYO (Reuters) - Japanese trading house Sojitz Corp (2768.T: Quote) said it has forged a rare earth procurement deal with Australian miner Lynas Corp (LYC.AX: Quote), marking the latest move by Japan to reduce its reliance on China for the crucial minerals.

 

News of the deal comes one day after Australia promised to be a future long-tem supplier of rare earths to Japan, after shipments from China to Japan had stalled amid a spat over disputed islands in the East China Sea.

 

Shares of Sojitz surged 9 percent on the news, with volume spiking to more than 8 times the daily average of the past 3 months.

 

Under the agreement, the two aim to start shipments of 1,000 to 3,000 tonnes of rare earth in the final quarter of 2011, and boost shipments to more than 9,000 tonnes per year by early 2013, Sojitz said.

 

Sojitz and the state-run Japan Oil, Gas and Metals National Corp (JOGMEC) will together invest up to $250 million to finance a Lynas expansion project, Sojitz said, adding that buying a stake in Lynas in the future was an option.

 

China has a virtual monopoly on world supplies of rare earths, used in everything from flat screens to defence equipment, and its moves to curb exports have prompted consumer nations to look for alternative supply sources and suppliers to expand business opportunities.

 

Lynas, which plans to begin production next year, has already signed about half a dozen supply contracts including a new long-term deal with a European consumer announced earlier this month.

 

While China accounts for about 97 percent of world's total production, rare earths reserves are available in other regions.

 

China has the largest reserves, accounting for 36.4 percent of total, followed by 19.2 percent in the Commonwealth of Independent States, 13.1 percent in the United States and 5.5 percent in Australia, according to USGS Mineral Commodity Summaries.

 

Japan's trade minister Akihiro Ohata said on Wednesday that Japan-bound rare earth shipments have left China, confirming the end of a de-facto suspension by Beijing on exports of the minerals since late September.

 

Japan has been stepping up efforts to diversify its sources of supplies of the strategic minerals, agreeing with Mongolia last week to cooperate on developing mineral resources, including rare earths.

 

Last month, Tokyo agreed with India to cooperate in developing and recycling rare earth minerals and rare metals, as well as with Vietnam to mine rare earths in the southeast Asian nation.

 

Demand for rare earths is forecast to grow by between 7 percent and 9 percent a year over the next five years against a 5 percent increase in supply, according to Resource Capital Research analyst Trent Allen.

 

"This could create severe undersupply of some elements, especially the scarce middle and heavy rare earths," Allen said. (Additional reporting by James Regan in Sydney and Chikako Mogi; Editing by Chris Gallagher and Nathan Layne)

 

ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚© Thomson Reuters 2010 All rights reserved

 

 

Link to comment
Share on other sites

.JAPAN Inc is fighting back against China's stranglehold on the global rare earths market through a financing and supply deal with rare earths project developer Lynas Corporation. The deal has the tacit endorsement of Canberra.

 

In a move to be led by Japanese trading house Sojitz, $US250 million ($A255 million) in Japanese government agency financing will be made available for an accelerated expansion of Lynas's Mount Weld rare earths project near Laverton in Western Australia, and the project's associated processing facilities in Malaysia. The deal is underpinned by a supply agreement under which the Japanese market will be allocated a minimum of 8500 tonnes of rare earths annually for the next 10 years. That represents as much as 25 per cent of Japanese demand.

 

China's dominance of the rare earths market has come into sharp focus recently, with China suspending/delaying shipments to Japan in an extension of their territorial dispute in the South China Sea.

 

China controls the world's rare earths industry and likes to think it is to that sector what Saudi Arabia is to oil. Rare earths are increasingly found in high-end applications, including compact fluorescent light bulbs, flat panel displays and iPods.

 

Japan is the fourth largest consumer of rare earths and the stress of having to rely on Chinese supplies in the wake of Beijing's directive to hold back was an issue in Canberra earlier in the week.

 

Japanese Foreign Minister Seiji Maehara raised the issue during trade talks, leading Foreign Minister Kevin Rudd to say that Australia ''understands the significance of rare earths globally.''

 

''Australia stands ready to be a long-term, secure, reliable supplier of rare earths to the Japanese economy,'' Mr Rudd said ahead of the Lynas/Sojitz deal.

 

Somewhat ironically, it was the former Rudd government that blocked a proposal last year for China Non-Ferrous Metal Mining Company to acquire a 51.6 per cent interest in Lynas for what can now be seen as the knockdown price of $252 million.

 

The Chinese walked away after Canberra said CNMC would not be allowed to have more than 50 per cent of Lynas and would not be allowed to have board control.

 

Lynas is now a $2.5 billion company, meaning Canberra did Lynas shareholders a favour.

Link to comment
Share on other sites

JP Morgan upgraded them to a target of $1.71 this morning on the news from Japan, market is reacting accordingly

 

Interesting how they value it - they had a target of $1.70 back when the basket price was about $25. Now it's over $67.....

 

Methinks they're just playing games with the poor mug retail punters!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...