By Melanie Burton and Rishav Chatterjee
(Reuters) – Australia’s Lynas Rare Earths said on Monday its second-quarter revenue fell sharply, missing analysts’ estimates, as prices plunged during a slowdown in construction activity in China, sending its shares to 30-month lows.
The world’s largest producer of rare-earths outside China said its sales fell 51.7% to A$112.5 million ($74.06 million) in the three months to Dec. 31, from A$232.7 million in the year-ago period. It missed Macquarie’s estimate of A$117.8 million.
Shares of the miner dropped as much as 3.4% to A$5.75 to hit their lowest since July 20, 2021, as of 0009 GMT.
“Major issue for the company at present is the commodity price trajectory and demand in China,” said analyst Dan Morgan of Barrenjoey.
“There wasn’t anything positive company said on demand to change prevailing market mood.”
Lynas has been upgrading its Malaysian processing facilities to increase separation capacity to 10,500 tons per year for neodymium and praseodymium, used in magnets in sectors from electrified transport to defence.
The firm halted all Malaysian operations, barring one, in mid-November.
The Mt Weld Expansion Project in Western Australia remains on track, Lynas said, after a completed drilling program showed extensive rare-earth mineralisation around the mine.
Rare earth prices during the quarter extended declines as demand in China, especially in the country’s appliance sector, fell with the construction downturn, Lynas said.
The miner said it has largely completed construction at its Kalgoorlie Rare Earths Processing Facility which will feed Mixed Rare Earth Carbonate to the new Lynas Seadrift Facility in Texas serving the U.S. Department of Defense.
Sales fell as Lynas raked in an average selling price of A$28.70 per kilogram (kg) for its product range, sharply below the A$58.40 per kg last year.
Lynas estimated total March quarter production of around 1500 tons, above its previous estimate of around 900 tons.
($1 = 1.5191 Australian dollars)
(Reporting by Shivangi Lahiri, Rishav Chatterjee and Sneha Kumar in Bengaluru; Editing by Lisa Shumaker, Richard Chang and Sherry Jacob-Phillips)
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