Rare earth stocks in focus amid US-China trade talks

Shares of several U.S.-listed rare earth miners fell sharply on Monday as U.S. officials said they expect China to delay introducing export controls on critical minerals as part of a broader trade deal.

Critical Metals fell more than 17% in early deals, USA Rare Earth declined 12%, MP Materials was down 7.3% and Trilogy Metals lost 15%. Energy Fuels and NioCorp Developments, meanwhile, traded 14.7% and 9.5% lower, respectively.

U.S. Treasury Secretary Scott Bessent told NBC News’ “Meet The Press” on Sunday that Washington and Beijing were expected to reach a deal to avoid a new 100% U.S. tariff on Chinese goods, with Beijing set to defer on imposing strict rare earth export controls.

His comments come ahead of a high-stakes meeting between Chinese leader Xi Jinping and U.S. President Donald Trump on Thursday.

Trump on Monday said that the U.S. and China were set to “come away with” a trade deal. Speaking aboard Air Force One en route to Japan amid a weeklong Asia trip, Trump said that he had “a lot of respect for President Xi.”

The U.S. president had previously threatened to impose new tariffs of 100% on imports from China starting from Nov. 1, adding at the time that the White House would also slap export controls on “any and all critical software.”

China, for its part, announced a new framework earlier this month for restricting rare earth exports. The move was seen as a stark warning to the West — and a reflection of the deepening mistrust between Beijing and Washington.

To be sure, China is the undisputed leader of the critical minerals supply chain, producing nearly 70% of the world’s supply of rare earths from mines and processing almost 90%, which means it is importing these materials from other countries and refining them.

“Details are still limited, and nothing will be finalized until the Trump-Xi meeting,” Wolfe Research analyst Tobin Marcus told clients in an Oct. 26 note.

“But a renewed truce now seems near-certain, with China likely fully delaying their rare earth export controls for a year—better than the alternative of an agreement to grant licenses,” Marcus said.

— CNBC’s Michael Bloom contributed to this report.