Shares of rare earth miners are down sharply on Oct. 27 after U.S. officials said that they expect China to maintain curbs on exports of the critical metals, minerals and magnets for the time being.
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Officials in the Trump administration said China is likely to delay eliminating export controls on critical rare earth minerals as part of a broader trade deal, and that the issue might be dealt with separately from a broader, more comprehensive trade agreement.
That news has stocks of leading critical metal miners down sharply on the day. USA Rare Earth’s (USAR) stock is down 10%, while shares of MP Materials (MP) are down 7% and Lynas (LYC) is down 2% on the day. Stocks of smaller miners are lower by as much as 15%. China has a near-monopoly on the world’s supply of rare earths that are used in technologies ranging from smartphones to electric vehicles.
Big Meeting
The U.S. and China look set to sign a comprehensive trade deal in coming days, following a high-profile meeting between Chinese leader Xi Jinping and U.S. President Donald Trump on Oct. 30. Trump said that the U.S. and China are set to “come away with” a trade deal.
However, China looks likely to stick with the framework it outlined earlier in October for restricting rare earth exports to the U.S, at least for now. While stocks of rare earth miners are down on that news, the broader stock market is rallying on news of a U.S.-China trade deal.
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