Why rare-earth stocks are rallying as China gears up for Trump meeting on trade

By James Rogers

China is tightening export controls over rare earths amid ongoing trade tensions with the U.S.

Chinese President Xi Jinping and President Donald Trump, shown here in Beijing in 2017, could meet later this month, according to reports.

Rare-earth stocks are climbing after Beijing tightened its control over the valuable materials Thursday ahead of a possible meeting between President Donald Trump and his Chinese counterpart, Xi Jinping.

The meeting, which comes amid ongoing trade tensions between the two countries, could take place later this month.

China is by far the world's largest producer of rare-earth elements, so the reported tightening of export controls has thrust U.S. producers of rare earths into the spotlight. Rare earths and other critical minerals such as lithium are vital to a host of industries, including electric vehicles, consumer electronics and defense.

Shares of USA Rare Earth Inc. (USAR) climbed 15% on Thursday, for a record close. The stock soared last week when the company's CEO said that it is in direct contact with the U.S. government, which has recently taken equity stakes in companies in industries it deems key to national security.

Shares of one of those companies, rare-earth producer MP Materials Corp. (MP), rose 2.4%.

Lithium stocks were also getting a bump, as China said it would tighten requirements for companies to export certain lithium batteries, the Wall Street Journal reported.

Shares of Lithium Americas Corp. (LAC), another company the federal government has taken a stake in, gained 2.2% to snap a three-day losing streak. Lithium is a key component in rechargeable batteries that power electric and hybrid vehicles, as well as a host of consumer electronics and household products.

Shares of Albemarle Corp. (ALB), which is also involved in the lithium business, jumped 5.3%, enough to lead the S&P 500 index's SPX gainers on the day.

-James Rogers

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10-09-25 1909ET