In the initial minutes of Thursday’s trading session, the performance of rare earth stocks exhibited a mixed response as investors processed a significant development from South Korea. U.S. President Donald Trump and Chinese President Xi Jinping have reportedly reached a pivotal agreement to delay the implementation of stringent Chinese export controls on rare earth elements by at least a year. This news arrived after the two leaders concluded a series of trade policy negotiations aimed at reinforcing economic ties with various Asian and Southeast Asian nations.
MP Materials, which is notable for operating the United States’ only commercial-scale rare earth mine, initially saw its stock dip by over 1% before staging a recovery to secure a gain of more than 0.8%. Conversely, USA Rare Earth experienced a more substantial decline, falling more than 2.8% and remaining in negative territory. NioCorp Developments also faced challenges, losing over 2.5% at the outset but subsequently rebounding to achieve a gain exceeding 4%.
The agreement made between Trump and Xi included the reduction of U.S. tariffs on Chinese goods related to fentanyl from 20% to 10%. In return, Xi has pledged to exert significant efforts to halt the flow of fentanyl into the United States, a critical component of the discussions. Central to the talks were China’s previously announced export controls on rare earths, which heightened concerns within the market due to their potential to severely limit exports of products containing even minimal quantities of these crucial minerals. The newly agreed-upon delay will prevent the enforcement of policies that included a complete ban on exports for applications related to weapons development for at least a year.
Trump, speaking to reporters aboard Air Force One, reaffirmed the agreement, stating, “They’re not going to impose the rare earth controls.” This assurance follows data revealing that China has increased its mining and refining of rare earth metals by approximately 14% year over year from the beginning of the year to the end of the third quarter. The shift in policy and the resulting investor sentiment may have significant implications for the future of the rare earth market, particularly in light of ongoing global demand for these essential materials.
