Positioning Ahead of China on Rare Earth Stocks in 2024

Everyone that’s been in the resource space for any amount of time knows the line made popular by Rick Rule, “You’re either a contrarian or a victim.”

China plays the contrarian game very well. 

After decimating the United States’ hold on the rare earth space in the 90’s – and the billions of dollars in technology that come with it – it is once again flexing its contrarian muscle on these critical metals.

Check out our latest free research reports for in depth analysis on specific market trends. View Reports

A decade ago, China controlled 97% of rare earth production. Today, that number is closer to 70% and China is doing something about it. 

Positioning Ahead of China on Rare Earth Stocks in 2024

One hundred percent equity of Guangdong Rare Earth Group was transferred to China Rare Earth Group on January 1 in an effort to consolidate the major producers from four companies to three. 

Growing production from Australia and Vietnam, among others, has not only incentivized China to further consolidate the rare earth space, it has taken it a step further by imposing export restrictions on rare earth processing technologies.

That’s something I’ve argued was a vulnerability for over a decade. The move was a direct response to the U.S. imposing restrictions on Chinese entities.

Check out our premium publications for more trading recommendations and exclusive coverage on the markets. View Publications

DigiTimes Asia reported that on December 21, the Ministry of Commerce of China updated its catalog for technologies under export control, and rare earth processing technologies will be subject to export curbs.

According to the revised document, technologies for refining, processing, and utilizing rare earth elements, coded 083201J, encompass technologies for rare earth extraction and separation, production technology for rare earth metals and alloys, samarium-cobalt, neodymium-iron-boron, cerium magnet preparation techniques, and preparation technology for rare earth borate oxy-calcium.

This came after it imposed restrictions on graphite, germanium, and gallium earlier in 2023.

The high level chess game underscores why governments must support an independent critical metals supply chain.

Whether it’s here in North America or overseas in Europe, governments must continue to be proactive – through legislation and through financial incentives – in supporting and accelerating the development of the entire supply chain or risk losing the technology these important metals facilitate. 

Companies that can contribute to the solution will do very, very well. 

Let’s get it! 

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle