- Rare earth exports from China stood at 5,774 metric tons in September, compared with a seven-month high of 6,146 tons in August.
- The critical minerals have become the focal point of growing trade tensions between Beijing and the U.S.
- “I don’t want them to play the rare earth game with us.”- Trump fired a warning at Beijing on Sunday.
Chinese rare earth exports declined in September, sequentially, after posting three straight months of gains, official data showed on Monday.
According to a Reuters report, citing the General Administration of Customs, rare earth exports from the country stood at 5,774 metric tons in September, compared with a seven-month high of 6,146 tons in August. However, on a year-over-year basis, they rose 17.5%.
The figures came amid already rising tensions between the U.S. and China over the curbs on rare earth exports, imposed by Beijing earlier this month.
Why Is China Putting Export Curbs On Rare Earths?
Rare earth supplies from China, the top producer, have become the focal point of a growing trade dispute between Beijing and Washington, D.C. China dominates over 90% of refined rare earth, which are used in a wide range of applications, ranging from semiconductors to missile defense systems.
While rare earth minerals are not particularly scarce, most of the world has grown to rely on China for these metals. China has invested heavily in its production amid a decline in non-Chinese sources, a situation that companies have blamed on China’s policy to set a low price floor.
After implementing the export curbs, Beijing stated that some foreign organizations and individuals have transferred or supplied rare-earth materials originating from China to entities involved in military and other sensitive sectors, posing “serious harm” and potential threats to China’s national security and global nonproliferation efforts.
What Is The U.S. Doing About It?
The U.S. is looking to bolster its domestic production to meet the rapidly growing demand. The Department of Defense has taken a 15% stake in MP Materials, the top domestic producer. Washington has also agreed to acquire stakes in Trilogy Metals and Critical Minerals to help the companies advance their projects.
On Sunday, Trump said that rare earths, soybeans, and fentanyl are expected to be key points of discussion with Beijing. “I don’t want them to play the rare earth game with us,” he reportedly told reporters on board Air Force One, days after he threatened to put 100% tariffs on Chinese exports to the U.S.
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What Is Retail Thinking About US Rare Earth Stocks?
Retail sentiment on Stocktwits about rare earth miners, Critical Minerals, MP Materials, and Trilogy Metals was in the ‘extremely bullish’ territory at the time of writing.
Critical Minerals stock has more than tripled this year, while MP and Trilogy stocks have risen over fivefold.
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