Lynas Rare Earths shares (ASX: LYC) closed at $8.60 today, a significant 8.22% drop that has seen the break above $9 halted with the ever-present influence of China on the global rare earths market casting a shadow. This decline follows a period of upward momentum that saw the stock reach a two-year high above $9 ($9.42), fuelled in part by automakers’ concerns over China’s rare earth export restrictions. The surge highlighted Lynas’s strategic importance as the largest rare earth producer outside of China, offering a crucial alternative amid escalating global tensions. However, the recent pullback suggests that this optimism may be tempered by underlying uncertainties.
The surge in early June was linked to fears that China’s export curbs could disrupt global automotive production, thereby increasing the demand for Lynas’s output. This event underscores the inherent link between Lynas Rare Earth shares performance and the geopolitical dynamics surrounding rare earth supply. With significant developments in U.S.-China trade relations now progressing the outline of a deal to respective leadership, it seems an agreement for Chinese rare earths to find their way back onto the market could be moving closer.
Operationally, the company’s recent financial performance provides a mixed picture. In April 2025, Lynas reported gross sales revenue of A$123 million for the third quarter, falling short of market expectations of A$155.7 million. The shortfall was attributed to lower market pricing for rare earths and heightened global trade volatility. Similarly, the first-half profits reported in February 2025 showed a significant decline, impacted by weak prices and rising operating costs. This financial background suggests that while Lynas may benefit from supply chain disruptions in the short term, it faces significant challenges in maintaining profitability in the face of broader market headwinds.
Lynas is actively pursuing strategic initiatives to strengthen its position. CEO Amanda Lacaze announced plans to acquire rare earth deposits in Malaysia and Brazil, aiming to diversify the company’s resource base and reduce its dependency on any single source. This move is crucial for long-term sustainability, but it also introduces new risks and challenges, including navigating environmental regulations and securing necessary approvals in these regions.
After an impressive run that has seen Lynas gain 31.7%, even after today’s pullback, it is important to temper upside expectations with a degree of risk management.
Top Australian Brokers
- Pepperstone - Trading education - Read our review
- IC Markets - Experienced and highly regulated - Read our review
- eToro - Social and copy trading platform - Read our review
Don’t Buy Just Yet
You will want to see this before you make any decisions.
Before you decide which shares to add to your portfolio you might want to take a look at this special report we recently published.
Our experts picked out The 5 best ASX shares to buy in 2025.
We’re giving away this valuable research for FREE.
Click below to secure your copy
