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Comments on this blog should never be taken as investment advice


Posts on this website are general "tips" and nothing more than that and should never be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. Sparty's posts nearly always relate to companies that he either holds, has held or intends to hold.

Main ForumWill LYNAS leap on China's 7% reduction of exports

  • It seems that many have misunderstood the ramifications of China's announcement re the new export quota for 2011 2H... In a nutshell by including for the first time ferrous alloys (dysprosium ferro alloy, terbium ferroalloy etc.) which contain more than 10% rare earths in the quota the yearly allowance is around 28,200t down from the 2010 allowance of 30,260t.

    This 7% reduction in the face of increasing demand combined with the recent reduction in LYC's share price points to a buying opportunity as LYC will be the first new non-China based supplier.

    One well respected broker has LYC as a buy with a price target of $2.60 predicated on a REE basket price of US$30/Kg until 2015 when competing supply will come on-stream. As today's REE basket price is ~ US$225 per kg there seems to be plenty of upside to that particular forecast...

    As Alkane will also soon be in production it may be worthwhile to grab a few sooner than later.

    Short term, 0 - 5 years, Criticality Matrix for Green Technology Substrates (US Department of Energy 2010)

    REEs-green-criticality.gif

    (I hold LYC, ALK, GGG and KRB)

  • Hindsight: Dec 2011 to July 2011: REO prices have dropped as have the prices of REO companies. But the graph above stands. Dys is the best of the best REO with Neo Ter and Ytt the next best.

    Alite

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