Lynas Rare Earths’ shares dropped as much as 10% on Tuesday after the company released its March quarter results.
The Australian miner posted revenue of $85.37 million for the first three months of 2021, up 20.6% when compared to a year earlier ($70.48 million), as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).
Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.
The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties.
“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilization rates a bit,” portfolio manager Andy Forster of Argo Investments told Reuters.
“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”
“While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.
Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.
Lynas’ stock was down 8.31% at close time on the ASX. The company has a $4.07 billion market capitalization.