(Bloomberg) -- Lynas Rare Earths Ltd. said Chinese demand for its materials — used in everything from wind turbines to military hardware and electric vehicles — is picking up, with prices showing signs of recovery following a two-year slump.
Prices of rare earths have been hit by a glut in supplies, with a benchmark index in Shanghai showing they fell almost 70% from a peak in February 2022. After bottoming in March, they have ticked up about 17%.
“The price certainly moderated much more than I think most people thought it would,” Chief Executive Officer Amanda Lacaze said in an interview with Bloomberg TV on Wednesday. “We are seeing some pickup of demand, particularly inside China, and some destocking of inventories that had been built up on the back of previous demand.”
The company mines and processes the material in Australia and Malaysia and is the biggest producer of rare earths outside China. Lynas suffered a 73% plunge in profits to A$84.5 million ($57 million) in the year to June, it reported in company filings Wednesday.
China dominates mining and production of the minerals, although the US and Australia are trying to challenge its stranglehold on the market by unlocking their significant deposits. Despite the market downturn, Lynas has proceeded with an expansion of its Mt Weld mine and processing facility in Western Australia’s Kalgoorlie, and is developing a processing plant in the US.
--With assistance from Yvonne Man.
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