Lynas Rare Earths Soars 12.52% to A$9.26 as Supply Jitters Rattle Global Automakers

Key Moments:

Investor Interest in Lynas Rare Earths Soars

Lynas Rare Earths’ stock rallied 12.52% to A$9.26 on June 5th, marking the company’s highest price since 2023. The surge was attributed to fears of supply chain disruption due to Chinese rare-earth export restrictions, seeing Lynas is the second-largest producer of rare-earth minerals globally.

Analysts have noted that escalating geopolitical tensions and heightened demand for critical minerals are creating a favorable backdrop for the Australia-listed company. According to Vantage Markets’ Hebe Chen, “Lynas’ rally… is a powerful reflection of the dual drivers at play today: escalating geopolitical tensions and surging demand for green technology.” He added that markets were adjusting for supply risks due to China’s stricter rare-earth export controls, which in turn positioned Lynas as a strategic hedge.

China’s Export Policies Spark Global Alarm

Back in April, China enforced new restrictions on the export of strategic rare-earth materials in what was widely seen as a response to tariffs imposed by US President Donald Trump. The policy rattled markets globally, particularly those surrounding electric vehicles, defense systems, and other industries dependent on the 17 rare-earth elements.

Automakers in Germany have recently sounded the alarm, intensifying global concern. Several production lines have already gone offline due to depleted supplies, according to CLEPA, the European Automotive Supplier Association. Mercedes-Benz, meanwhile, revealed it is in active conversations with key vendors to develop stockpiles as a buffer against further supply disruptions.

China remains dominant in the global value chain despite rare-earth elements’ abundance. This is mainly due to China’s technological expertise and infrastructure for processing these notoriously difficult-to-refine materials. This is also why most of the materials that the US extracts from its lone rare-earth mine in California are sent to be processed in China.