According to foreign media reports, Australia's Lynas rare earth separation and processing plant in Kuantan, Malaysia will face a review storm: the new Mahathir government recently announced that it will conduct a three-month review in the near future. Fears that the newly elected coalition government could close the factory sparked a massive sell-off last month, sending the company's shares down 23 per cent to $1.61, their lowest level in a year.

Lynas' Wt Weld mine in Western Australia is currently the largest rare earth supply base outside of China. In view of Lynas' global rare earth supply share of about 12% and praseodymium neodymium's global share of about 20%, this environmental audit has brought greater uncertainty to the global supply of rare earth raw materials.

Domestically, a new round of rectification of the illegal mining of rare earths has begun, and the price of rare earths in the fourth quarter is worth looking forward to. In the context of the rare earth rectification policy order issued by the Ministry of Industry and Information Technology, Jiangxi announced a special campaign to crack down on rare earth laws and regulations from September 2018 to January 2019; Shandong also issued a document to strictly control rare earth mining, with a limit of 3,600 tons this year. The intensity of this action shows the determination of the regulatory authorities to rectify rare earths, and it is expected to set off a new wave of illegal rare earth mining and rectification across the country.

The trade war is intensifying, and rare earths, as strategic resources, have a certain weight in international confrontation. The results of Lynas's review this time will have a significant impact on the global rare earth pattern. In addition, with the demand for prices in the peak season in the fourth quarter, it is expected that the industry is expected to usher in a recovery opportunity.