Lynas Corporation Limited [ASX:LYC] is an integrated source of rare earths from mine to customer. The company has a portfolio of assets to explore, develop, mine and process rare earth minerals.
Founded in 1983, the global trade war between the world’s two biggest economies has placed Lynas in a unique situation to benefit.
Shares are up in value by 10.05% for the day.
Trade war pushing up share price
The US is threatening to impose tariffs on another US$200 billion of Chinese imports. China is vowing to respond in kind even though the Asian giant will quickly run out of US imports to tax, given the huge trade gap between the two countries.
This is why experts believe China could restrict the export of rare earths to hit back at the US as the country is the world’s dominant producer of these minerals — which are essential in manufacturing electronics including smart phones.
If China does decide to do this, it will drive up the price of the commodity and put Malaysian-based Lynas in a strategic position in the trade war, according to The New York Times.
Investors have seen this as an opportunity to jump on Lynas’ stock.
Can the buzz continue?
China has used rare earths as a trade weapon before against Japan in 2010 to get its way during a territorial dispute. That move sent prices of rare earths skyrocketing and you can bet a similar outcome will happen if China uses this as leverage against the US.
This level of control from China has put Lynas in a great position for its stock price to continue to rise.
For Money Morning