Rare earth and critical mineral stocks tumbled Monday amid growing expectations that China might pause its latest round of export control measures.
- UAMY stock is tanking. See the real-time price action here.
Over the weekend, Treasury Secretary Scott Bessent said that the US and China had drafted a trade deal ahead of this week's meeting between President Donald Trump and Chinese President Xi Jinping.
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Bessent indicated that the pending threat of Trump's 100% tariffs on Chinese imports, set to go into effect on Nov. 1, has been averted and he expects China to delay its rare earth and magnet controls for one year.
Rare Earth Stocks React
Reports suggesting that Chinese regulators will temporarily ease enforcement of export restrictions caused rare-earth mining stocks to pull back dramatically on Monday.
Shares of MP Materials Corp. (NYSE:MP), USA Rare Earth, Inc. (NASDAQ:USAR) and Trilogy Metals, Inc. (AMEX:TMQ) were all down by double-digits in Monday's midday trading, but recovered slightly headed into the closing bell.
Other critical mineral and rare earth-related companies were also moving lower, including:
- TMC The Metals Company Inc. (NASDAQ:TMC)
- Energy Fuels, Inc. (AMEX:UUUU)
- Northern Dynasty Minerals, Ltd. (AMEX:NAK)
- United States Antimony Corp. (AMEX:UAMY)
Investors should exercise caution, however, because the pullback may be temporary.
A brief pause in China's export restrictions does not resolve the fundamental tension between China's strategic resource management and U.S. efforts to diversify its supply chain.
Many companies across the EV, renewable energy, and defense sectors remain dependent on Chinese refining capacity. At the same time, the U.S. government and corporations plan to pour billions into domestic mining and processing initiatives.
A "breather" in China's export controls may ease immediate market anxieties, but it is unlikely to reverse the broader trend.
Rare earth stocks could rebound if China resumes or tightens its export controls, restricting global supply and pushing prices higher for key metals.
Continued growth in EV and renewable energy demand may further strain critical supply chains and benefit domestic producers.
As the U.S. government invests in domestic mining and processing, sentiment could rebound, supporting higher valuations for leading companies in the sector.
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