The Lynas Rare Earths Ltd (ASX: LYC) share price has kept investors on their toes lately.
Having spent most of this year trending generally upwards, the company's shares have lost around 11% of their value in April. For comparison, at the time of writing, the S&P/ASX 200 Index (ASX: XJO) has gained around 3.5% over the course of the month.
The Lynas share price started this month trading at $6.17. It reached its highest closing price for the month on 8 April, when it finished the day's trade at $6.50.
Currently, the Lynas share price is sitting at $5.50. So, what's caused its poor performance lately?
Let's take a look at what the rare earth producer has been up to.
Image source: Getty Images
Lynas' April
The Lynas share price spent the first week of April trending upwards after a particularly volatile March.
We didn't hear much out of the company until 20 April, when its quarterly activity report was released to the market.
Within it, Lynas highlighted the growing demand for rare earth minerals for use in renewable energy and electric vehicle technology. Its production levels of Neodymium and Praseodymium were similar or greater than the previous quarter's, and it received $110 million in sales revenues, partly due to a delay in cash collection from the prior quarter.
While this all sounds positive, the report also noted the company's subdued sales due to the COVID-19 pandemic's impact on trade, as well as shipment delays caused by the Suez Canal blockage.
Further, the company reported that several Chinese rare earth producers, including the leading global rare earths supplier China Northern Rare Earth Ltd, are planning to increase their production. China Northern, which produces around 60% of China's total rare earth supply, wants to double its production by 2024. China already has a small monopoly on rare earth production, with Lynas being one of only a few producers located outside of the country.
Despite Lynas dubbing the quarter's results "strong", after their release, the company's share price retreated. On the day the results were announced, Lynas shares closed the session 8% lower than the day prior. Over the following days, the Lynas share price continued to fall.
At the time, The Motley Fool Australia reported that the last time China increased its rare earth production, the Lynas share price fell by a whopping 90%.
While circumstances are quite different in this instance, perhaps history has investors worried.
Lynas share price snapshot
Despite the woes felt by Lynas shareholders this month, the company's share price is still performing well on the ASX overall.
Currently, it's up 31% year to date. It's also up by a mammoth 219% over the last 12 months.
The company has a market capitalisation of around $4.9 billion, with approximately 901 million shares outstanding.
