In the early minutes of Thursday’s trading session, rare earth stocks exhibited a mixed performance as investors responded to a significant diplomatic development between the United States and China. The news emerged from a high-stakes summit in South Korea, where U.S. President Donald Trump and Chinese President Xi Jinping announced a deal to delay the implementation of stringent export controls on rare earths by at least one year.
Shares of MP Materials, the sole operator of a commercial-scale rare earth mine in the U.S., initially dipped over 1% but later swung back to show a modest gain of more than 0.8%. In contrast, USA Rare Earth experienced a decline of over 2.8%, while NioCorp Developments dropped more than 2.5% before rebounding to achieve an increase exceeding 4%.
The meeting between Trump and Xi, which took place late Wednesday night, followed a week filled with discussions on U.S. trade policy involving several Asian and Southeast Asian nations. As part of the newly reached agreement, the U.S. will reduce tariffs on certain Chinese goods related to fentanyl, dropping them from 20% to 10%. In return, President Xi has pledged to make significant efforts to curtail the flow of fentanyl from China.
The discussions were particularly focused on China’s recent announcement of export controls on rare earths, which had previously sent shockwaves through the market due to their stringent nature. These controls were set to restrict exports of products containing even minimal amounts of rare earth elements and included a complete ban on exports intended for weapons development applications. However, Trump’s announcement aboard Air Force One indicated that the Chinese government has agreed to postpone these controls, with the immediate future now free from the looming restrictions.
Recent data revealed that China has ramped up its mining and refining of metals, including rare earth elements, by 14% year over year during the first three quarters of the fiscal year. This increase highlights China’s ongoing commitment to maintaining its prominence in the rare earth supply chain, even as it navigates complex international trade dynamics. As the market absorbed this new information, the mixed reactions among rare earth stocks reflected the uncertainty surrounding the global rare earth landscape and its critical role in various high-tech and green technologies.
