The new rules led to a sharp increase in the share prices of Chinese firms, such as China Northern Rare Earth Group High-Tech Co. and JL-Mag Rare-Earth Co., on Monday.
U.S. rare earth stocks will likely garner increased investor attention on Monday, as China reportedly moved to impose strict regulations on rare earth minerals.
According to a Bloomberg report, citing the Ministry of Industry and Information Technology, Chinese authorities are pushing for a system to improve tracking of all domestic supply, including a requirement to send regular output data to the government.
The plan announced on Friday was based on proposals unveiled in June 2024, the report added. The new regulation also clarifies the responsibilities of different bodies, like companies, local governments, and ministries, in managing output and monitoring any infringements.
The new rules led to a sharp increase in the share prices of Chinese firms, such as China Northern Rare Earth Group High-Tech Co. and JL-Mag Rare-Earth Co., on Monday.
Rare earth materials, used in everything from electric vehicles to missile-guidance systems, have been used as a potent weapon by Beijing amid the trade war with the U.S. China has put several key elements under an export restrictions list that has soon forced Western companies, from automakers to consumer electronics firms, to start curtailing their capacity.
While shipments are slowly climbing back, the U.S. is bolstering its supplies of rare earth minerals and has taken a 15% stake in MP Materials, the largest U.S. supplier of rare earth elements, and loosened restrictions on deep-sea mining.
Retail sentiment on Stocktwits about MP stock was in the ‘bearish’ territory at the time of writing.
The company, which stopped its refining operations in China following the trade war, has also signed a $500 million agreement with Apple to supply rare earth minerals.
MP Stock has more than quadrupled this year, while the deep-sea mining firm The Metals Company has risen an eye-popping 326%.
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