"LA and CE prices for non china customers will be controlled by MCP and Lynas."
Current non chinese consumption is 35%. Current chinese production is 90%
OK. Here's another report. Feel free to challenge with your "ideas"
"Illegal Rare-earth Smuggling Affects The Chinese Industry" March 25 2014
The Chinese government started cracking down on the smuggling of the rare earth elements. In 2013, they LOST AN ESTIMATED 19,000 TONS of RARE-EARTH OXIDES, which were illegally mined and exported. The country’s legal production of rare-earth in 2013 was 80,400 metric tons.
It is estimated that china has about 30 percent of the world’s rare-earth reserves. They discovered them in the 1980s and have since seen a growing stable demand for rare earth metals, which are used in various technological devices. According to the report “Situation of Rare Earth Industry Economy Operation in 2013” which was published by China’s Ministry of Industry and Information Technology (MIIT), China exported rare-earth that were about 12.6 billion USD last year alone. Because of the strict rules of China and controlling of the market of rare-earth, many illegal activities by the organized crime targeted mining and exporting of these rare elements. The wide use in electronics and motors industries caused the market to be thirst for it.
Smuggling harms the economy by depleting the resources and deflating the market price. Smuggling caused the Chinese government in 2013 to cancel 161 licenses of rare earth element and another 126 companies for smelting and separation were ordered to cease their activities and wait for correction and rectification. The government also has decreased the rare earth quotas to reach 15,110 tons in 2014 and identified 26 producers which can participate in mining and related industries to these quotas. This is not surprising, considering China lost 1.3 Billion dollars in 2013, because of the lowered prices mainly because of illegal activities.
Taken from article "China’s rare earth exports below quota in first half of year" InvestorIntel July 30 2014.
Obviously, current global demand for rare earths is recovering outside of China. However, the problem that China’s rare earth market is still dominated by illegal operations at present, China Mining Association reported on July 29th that current illegal or unlicensed rare earth ore production still reached about 40,000 tons to 50,000 tons in the domestic market. Which resulted in a serious oversupply of rare earth elements in the country and a sluggish rare earths price.
Lynas has spent a decade and hundreds of millions of dollars trying to break China’s stranglehold on rare-earths supply, but now the Australian miner’s shareholders worry that its big bet may have gone sour.
When prices of rare-earth elements used in products such as iPads surged three years ago, Lynas’s value shot up to around $2 billion on expectations its new mine and Malaysian processing plant would play a big role in meeting a shortfall in global supply.
Now, Lynas is battling to protect profits and put its finances on a more solid footing amid a collapse in rare-earths prices.
It is cutting jobs and shifting its headquarters to Kuala Lumpur from Sydney, while seeking new lenders to refinance its debt as hefty repayments loom.
Global mining companies are grappling with slowing demand for commodities ranging from iron ore to coal, but a near-90 per cent pullback in rare-earths prices since the third quarter of 2011 means Lynas has been hit harder than most.
LYNAS Corporation says it has made substantial progress in talks with its financiers, as it unveiled its fourth successive quarter of improved rare earths oxide (REO) production and sales.
The rare earths miner said it had continued to work with Nomura and its existing financiers regarding the potential restructure of its existing financing facilities.
“The detailed terms of these negotiations are subject to further due diligence and completion of definitive documentation,” Lynas said.
Shareholders responded poorly to the update in early trade. At 10.35am (AEST) Lynas shares were 18.29 per cent lower at 16.75c, against a benchmark index lift of 0.2 per cent. Lynas shares touched as low as 16.25c during the morning session.
In the June quarter, Lynas produced 1882 tonnes on an REO equivalent basis, a 73 per cent increase on the previous quarter.
Total tonnes shipped were 1630 tonnes, on an REO equivalent basis, up 117 per cent on the prior quarter.
The rare earths miner said June quarter production represented 47.5 per cent of its fiscal 2014 production, while June quarter shipment volume represented 54.2 per cent of the full-year total.
Production for the 12 months to June 30 was 3965 tonnes, while shipments during the year totalled 3008 tonnes.
Very to easy to explain. Number one issue with lynas was not reaching 11tpa by July. Number one issue was they were running out of cash. In the last quarter showed they were not going to survive unless they raised cash. Lynas raised 40m without difficulty. Upcomming report will show much better cash level than previous quarter.
This interview you are refering to does not give any current production numbers, only the CEO makes a generalized statement about about reaching 11tpa by December. You seem to believe this was "make or break" for them to achieve that in by July, it certainly is not. In the interview the also CEO states "project profitable even at current depressed prices".
This company actually is in the best postion it ever has been, the next report will be huge improvement from the last just based on cash level alone.
Trend clearly shows the stock is going higher. I think there is a wave of speculative money getting in with expectations of a better quarter. At the same time, copper and aluminum prices are higher, a good sign for industrial metals. REMX showing a good up trend. I think investors are now starting to buy what is probably the cheapest under valued space in the markets.
Euro banks are up on good euro zone PMI data for today. Beyond that, the stock will probably rise ahead of earnings on the 31st.
"............SVM is just fine for leverage.........." (And just so you know, I also own bullion) ..........Also......
"I'd say the share price is correlated to the company reporting poor performance"
That's correct, because it's very difficult to for any silver mining company to report *good performance* when silver price is very low.
"Though of course, for me the period that's most of interest is from about 2 years ago, when I first decided to short this stock because it looks like such a likely fraud"
Likey fraud?? Would like to see some facts that proves this company is an actual fraud. Because it isn't a proven fraud, share performance really is correlated to the price of silver, which has fallen in the same time period your interested in.
"Since Jan 3, 2011, SLV (iShares Silver Trust) is down about 30%... while Silvercorp is down about 80%"
Since June 1 the SLV is up about 11% and SVM is up about 32% in the same period. I can cherry pick a time period where it's looks I'm doing well with SVM against the SLV.
How about the last 6 months?? Neither Short or Bull has anything to brag about.
ET Now: US markets have been hitting record highs. Do you think that there is still some more steam left in US equities and if yes, which sectors do you like in US equities?
Marc Faber : In my view, there is only one sector that is particularly attractive and that is the mining sector. Gold and silver mining stocks are very depressed relative to the rates of the market and in absolute terms, in terms of valuations. So that sector is quite attractive.
I also think that coal shares have been oversold and they are now at a reasonably good value, but other than that, I do not see any particular value from a long-term perspective.
Now if you tell me that the market can go up another 10%, that may be the case, but it does not make for good value. Therefore if I look at the total return that I can expect from US shares over the next 5 to 10 years, it will be very disappointing. I would rather buy emerging market shares, which in terms of valuations are reasonably priced.
In the case of India, profit margins are at a historic low. So if there is an improvement in the economy and in the macroeconomic environment, corporate profit margins could expand.
Interest rates in India have a chance to come down at some point, which would be beneficial for corporate profits. So in general, I would rather invest in emerging economies than in the US from a long-term perspective. Now, as I said, if you tell me that the US market can go up another 10%, possibly it can then also drop 30%. - in ET Now July 2014
2 July 2014
Lynas Corporation (ASX:LYC, OTC:LYSDY) announces that it is implementing a number of
initiatives to streamline its operations thereby improving organisational efficiency and reducing
overall costs. The first is a simplification of the Company’s structure by co-locating management
personnel and resources with production and sales facilities in Western Australia and Malaysia.
This will result in the Company’s Head Office relocating from Sydney to Kuala Lumpur. Lynas will
remain listed on the Australian Securities Exchange.
“As I approach the end of my first month as CEO of Lynas, I am very focused on addressing those
areas of our business where we have been underperforming. I have reviewed the business with
the team and we have identified opportunities to improve cost, production and financial
performance,” said Amanda Lacaze, Lynas Chief Executive Officer.
“This streamlining of office locations is the first in a series of initiatives aimed at simplifying our
approach and focusing on the highest value drivers in our business.”
Other initiatives to deliver costs savings include reducing workforce numbers (mostly by reducing
contractor positions), improving asset utilisation, renegotiating supplier contracts and seeking
improvements in procurement practices.
“We are pleased to report that demand for Rare Earth Oxide (REO) products remains buoyant
and that the Company has achieved further increases in production and sales of REO products
during the June 2014 quarter,” said Ms Lacaze.
The company is maintaining a heavy focus on the ramp up of production at the Lynas Advanced
Materials Plant (LAMP) in Malaysia. Over the past quarter further bottlenecks have been
encountered which have affected production outcomes. These have been managed and each of
the major stages of the Phase 1 plant – Cracking & Leaching, Solvent Extraction and Product
Finishing – has individually been operated at target capacity during the quarter.
"China will only need to ship a few K ton’s to Keep La very low. They do not want to see these companies succeed. They will ship just enough to keep prices low."
Would like you to show facts to explain above quotes. China is supposedly is shipping just enough to keep prices low?? You would think that would ruin chinese ree companies too! They own the market, if anything China is trying to find ways of elevating prices.
Prices are low due to lack of demand and oversupply that has been
exaggerated by illegal mining.
I have to agree. At this stage, their ability to sell what they produce is critical. Someone with strong marketing skills as CEO is a step in the right direction. The market did not react significantly to this news.
Effective today, Amanda Lacaze has been appointed Executive Director and Chief Executive Officer of the Company following the resignation of Eric Noyrez. Ms Lacaze has been a non-executive Director of Lynas since 1 January 2014.
"La and CE are 71% of Lynas's and 83% of MCP's output. If they cannot break even on these two there is not enough of the other REO's to pull them out of the red."
Disagree. That may be a bigger issue for MCP but Lynas has been able to produce a
better mix with more Nd & Pr giving them a higher ASP. This fact alone puts Lynas in a good position for future profits.
Moly closed $2.50. I think it's good buy. Increased China taxation on rare earths could stimulate prices. Still believe Lynas is cheaper and will do much better in price appreciation.
I'm in at $3.98 as well. I do think rates will go back up actually but it shouldn't hurt the performance of Amour.