12 Jul 2013 11:19

KUALA LUMPUR, July 11 (Bernama) -- Lynas Corp expects demand for its rare earth products to pick up soon due to the current low price and lack of inventories among industry players.

It Chief Executive Officer Eric Noyrez however said that fresh demand would come from certain segments which saw inventories turning low due to higher demand from end-users.

"There will be some segment or market which would run out of rare earths by the end of this year, since the last time most of the companies bought the products was in 2010, when the price was still low," he told Bernama.

Noyrez said the company had now completed Phase One of the Lynas Advanced Materials Plant, while expansion of the plant under Phase Two was in the commissioning phase, in which the equipment were being tested.

However, he said there was no immediate plan to increase production to the new capacity.

He said the company would only begin Phase Two operation once the market demand improves, thus giving the right price for the rare earths in the market.

"Based on the related reports and other market reports, everybody is saying that now is the turning point for the market. The price was too high for the past two years and now has gone too low.

"The current rare earths market remains subdued. In response to this macro environment, Lynas is optimising production at the phase one capacity level," he added.

Lynas announced the implementation of a minimum price schedule for its rare earth products effective July 1, 2013 as the company believed that only prices which were sustainable for producers and customers would allow the rare earths market to grow to its full potential over the long-term.

"It is our responsibility as a rare earths producer to invest in the necessary environmental protection measures and encourage the development of sustainable practices that are safe for people, safe for the environment and secure for customers," Noyrez said.