Today has been a pretty interesting day for ASX shares so far. The S&P/ASX 200 Index (ASX: XJO) is currently 0.07% in the green so far this Wednesday after spending most of the day in the red. That makes the movements of the Lynas Rare Earths Ltd (ASX: LYC) share price even more noteworthy.
Lynas shares are currently up a healthy 3.27% at $9.31 each, defying the gloom of the broader market. This latest move brings Lynas one day closer to finishing the 2021 calendar year on a high.
This is a company that has managed to give investors a gain of more than 122% year to date so far this year. Lynas is also up more than 140% over the past 12 months.
So what's behind today's share price gains?
What's behind the Lynas share price surge today?
Well, unfortunately, it's not quite clear. There has been no official news or announcements out of Lynas today. Or indeed since 13 December.
However, we do have some second-hand news. As my Fool colleague James covered this morning, analysts at Macquarie Group Ltd (ASX: MQG) have just released analysis that argues Australia's top lithium miners are sitting in a powerful lithium-fuelled tailwind.
Macquarie reckons "electric vehicle adoption could keep lithium prices at record levels for four years". As such, it has named a bevvy of ASX lithium shares that it expects will benefit from this tailwind. These included Pilbara Minerals Ltd (ASX: PLS), Allkem Ltd (ASX: AKE) and Mineral Resources Ltd (ASX: MIN).
Now, Lynas is not a lithium company. It is in the business of processing rare earth minerals (as its name suggests). These mostly include neodymium, lanthanum and cerium. So why might this be relevant to the Lynas share price?
Well, rare earths are also a major component of the lithium electric batteries that power zero-emission vehicles. Neodymium, for instance, is often used in high-power electromagnets that are often found in electric motors.
So perhaps investors have taken note of this report, and have rewarded Lynas shares accordingly. That might explain why the share prices of Pilbara, Mineral Resources, and Allkem are all in the green today. Pilbara, in fact, is currently up more than 7%.
At the current Lynas Rare Earths share price, this company has a market capitalisation of $8.38 billion.
