Lynas Rare Earths Ltd (ASX: LYC) share price remained under pressure at the start of this week. In the first two trading days, Lynas shares lost 9.3% in value.
Image source: Getty Images
Ups and downs
It has been an exhilarating ride for investors in the Australian producer of rare earth minerals in the past few weeks. It was only three weeks ago that the Lynas share price reached a 14-year high of $21.96.
However, in the past week, it has fallen by almost 15%. Lynas finished Tuesday at $13.85, a loss of 1.2%, following a drop of more than 8% the day before.
Despite the recent hit, the Lynas Rare Earths share price has still rallied in the past 12 months, with a gain of 74%, and an even bigger one in 2025, a massive 112%.
No news, bad news
Lynas is the world's largest producer of rare earths outside China and is at the cutting edge of mining and processing. Rare earth minerals are crucial for a variety of high-tech and high-growth applications, like electric vehicles and renewable energy. In the next few years, Lynas could be one of the main beneficiaries of the international defence and automotive sectors, which are looking more and more for alternative sources as China tightens export restrictions.
It is hard to pinpoint why the share price of Lynas is under pressure. After a busy period of earnings reports, international trade developments, and export policy debates, this week has been relatively quiet for Lynas. No news, bad news it seems.
However, Lynas isn't the only one suffering. A number of its competitors' shares have also been under pressure. Analysts at Macquarie Group Ltd (ASX: MQG) noted last week that uncertainty surrounding China's export controls could impact Lynas and the sector. The Lynas board remains cautiously optimistic. During the recent meeting between Trump and Xi, the U.S. and China reached a trade framework to ease tariffs and postpone export controls for a year. This alleviated fears of supply chain disruptions, although the fine print still needs to be finalised.
To buy or not to buy?
The uncertainty around China exports, combined with the usual fluctuations in the commodity market, could be the main reasons for the plummeting Lynas share price.
The majority of brokers have retained a 'hold' on Lynas, with an average price target of $16. In its latest report, Macquarie also marks Lynas as neutral with a price target of $17. Even with the apparent upside of more than 20%, it doesn't seem that the risk-reward ratio warrants a buy advice.
