The Lynas (ASX:LYC) share price has hit 10 9-year highs so far this month. Here’s why

Lynas shares have enjoyed a spectacular run over November so far…

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Far from the grizzly rain that Guns and Roses associated with November, it’s been a decisively sunny month so far for the Lynas Rare Earths Ltd (ASX: LYC) share price. Today alone, Lynas managed to put on a healthy 0.92% to finish the trading day at $8.75 a share.

But today also saw Lynas hit a new 52-week high of $8.80 as well. Normally, a new 52-week high (or in this case, a 9-year high) would be a cause of celebration for shareholders.

But considering this is the ninth straight new high Lynas has made over November thus far, shareholders might have not even noticed yet. Or maybe the party just hasn’t stopped, considering the Lynas share price is now up close to 110% in 2021 so far.

So why has Lynas had such a stupendously successful eleventh month of the year?

Well, we can likely put it down to a few factors.

What’s behind the Lynas share price’s November sun?

The most pressing of these could be the announcement the company released at the start of the month. On 1 November, Lynas announced it had inked a letter of agreement with Japan Australia Rare Earths (JARE). This agreement reconfirmed JARE’s long-term support for Lynas and its operations.

As my Fool colleague Tristan reported at the time, JARE, along with Lynas, are both “parties to a long-term senior loan facility, with a principal balance of US$145 million, an interest rate of 2.5% per annum, and a maturity date of 30 June 2030”.

JARE’s ongoing support is likely a positive development for Lynas going forward. Particularly factoring in this line of credit. JARE has already agreed to defer more than one interest payment for Lynas, so investors may have been buoyed by this as well.

Further, Lynas delivered its quarterly activities report back in late October. When it did, it also informed investors that demand for its products was already very high. But Lynas is expecting even higher demand going into 2022.

Apart from these potential factors, it’s not entirely clear why Lynas has had such a strong November so far. It’s also worth pointing out that ASX lithium, battery, rare earths, and renewable energy shares have all enjoyed enormous interest from ASX investors in 2021. It’s very possible that Lynas’ success over November has been driven by this alone.

Whatever the reason, it’s just another top-notch month (so far) that Lynas shareholders can add to their bedposts.

At the last Lynas share price of $8.75, this ASX rare earths company has a market capitalisation of $7.9 billion. It also has a price-to-earnings (P/E) ratio of 48.6.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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