Rare-Earths Stocks Rise Ahead of Trump, Xi Meeting. Why a Bad Week Can Still Come Good.

MP Materials stock has been volatile ahead of the meeting between Trump and Xi. (Courtesy MP Materials)

Key Points

• Rare-earths stocks, including MP Materials, rose Wednesday ahead of a meeting between President Trump and China’s leader Xi Jinping.
• China’s dominance in rare-earth processing, with an estimated 85% of global capacity, led to a rally after export restriction threats.
• Treasury Secretary Scott Bessent anticipated a deferral of China’s rare-earth curbs, causing recent stock declines for the sector.

MP Materials and other rare-earths stocks were mostly higher Wednesday ahead of a crucial meeting between President Donald Trump and China’s leader Xi Jinping.

Rare-earths stocks have tumbled in recent days amid expectations that the U.S. and China will reach an agreement over export controls on the critical materials. Beijing announced plans to tighten restrictions in October, which led to the U.S. threatening an 100% additional tariff on Chinese goods.

China’s threat essentially sparked the rare-earths rally in the first place–it dominates the industry with an estimated 85% of global processing capacity. The materials are used to make magnets that are critical for the technology, auto, defense and renewable energy sectors.

But Treasury Secretary Scott Bessent said Sunday that he anticipated a deferral of those curbs, after the two leaders meet in South Korea on Thursday.

It’s not been a good week so far for the sector as a result of those comments. MP Materials was down 8% through Tuesday, while USA Rare Earth has fallen 15% and Ramaco Resources has dropped 19%.

However, details of any deferral or easing of restrictions are yet to emerge. That paves the way for more volatility toward the end of the week and beyond. Bessent was also keen to stress that the framework negotiators had reached at the weekend was for Trump and Xi to discuss at their in-person meeting.

That uncertainty may be helping the stock recover slightly early Wednesday. MP Materials edged 0.5% higher and USA Rare Earth rose 1.3%, while Ramaco slipped 0.5% in early trading.

Write to Callum Keown at callum.keown@barrons.com