The Lynas Rare Earths Ltd (ASX: LYC) share price is shifting higher on Tuesday and now trades at $9.645, up 1.53%.
The gain marks a 15% increase since 10 May when the stock bounced from a low of $8.37 – its lowest point in six months.
By comparison, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) has gained 6.6% over the same period and is up 0.44% on the day so far.
What’s up with the Lynas share price?
Lynas shares have been creeping higher lately despite no market sensitive updates from the company.
Noteworthy, however, is the price of rare earth neodymium that has climbed almost 7% over the past month, bringing its increase to 90% in the past 12 months.
Neodymium had been trading at record highs in February 2022 before reversing course and bottoming in April.
Since then, prices for the rare earth have been climbing again.
Neodymium is predominantly used in products such as microphones, headphones, computer hard disks, electric motors, and many electrical goods.
With a surge in demand for electronic appliances over the last few years, prices for rare earths such as neodymium have also risen.
According to a report from Market Research Guru, this trend is set to continue, reflecting positively on rare earths stocks such as Lynas.
The report found:
The global Electrical Appliances market was valued at US$8.55 billion USD in 2021 and will grow with a [compound annual growth rate] CAGR of 4.12% from 2021 to 2027.
Meanwhile, further research submits that “[t]he global household appliances market is expected to grow from $502.28 billion in 2021 to $557.70 billion in 2022 at a CAGR of 11.0%”.
Lynas is actually the only rare earths processor outside of China, putting it front and centre in the race to keep up with global demand.
The company said that its “biggest challenge right now is to grow as fast as the market,” as quoted by Reuters. It added that simply keeping “pace with the market” isn’t enough.
Lynas has also received nearly $15 million in federal funding “to commercialise an improved process for producing rare-earth carbonate,” as outlined in the federal government’s 2022 Critical Minerals Strategy.
The post The Lynas share price has surged 15% in 2 weeks. What’s the deal? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Lynas Rare Earths right now?
Before you consider Lynas Rare Earths, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lynas Rare Earths wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Here are the top 10 ASX shares today
- Why is the Lynas share price powering ahead today?
- Falling ASX 200 mining shares ‘an opportunity to invest in sector leaders’: broker
- Why is the Lynas share price storming higher today?
- The Lynas share price has plunged 6% today! What’s going on?
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
from The Motley Fool Australia https://ift.tt/zLaK5Td
Leave a Reply