MP Materials, a company specializing in the mining and processing of rare earth elements, experienced a notable week both operationally and in the stock market. The company’s shares surged by over 16% throughout the week according to data from S&P Global Market Intelligence, following a series of favorable developments.
MP Materials owns and operates the sole rare earth mine in the United States. Rare earth elements are crucial for manufacturing specialty magnets used in high-tech products like smartphones. As the only domestic miner and processor of these elements, MP Materials has gained considerable attention amid the ongoing tariff tensions, particularly between the U.S. and China. China, possessing the largest reserves of rare earths, recently stopped exporting these critical materials.
Ahead of the trading week, the Financial Times reported, citing unnamed sources, that the Trump administration was contemplating an executive order to enable the stockpiling of rare earth materials. This was not the only significant occurrence for MP Materials. On Thursday, the company announced that it had halted the shipment of rare earth concentrate to China. This decision is significant as MP Materials largely depends on Chinese business partners for processing these materials.
In their announcement, MP Materials stated that selling their critical materials under 125% tariffs is neither commercially sensible nor in alignment with American national interests. The company highlighted that a significant portion of its production is directed to customers outside of China, including domestic clients and those in countries like Japan and South Korea. It also confirmed that it is continuing production and stockpiling of rare earths.
While the market positively reacted to the Financial Times article, it is important for investors to recognize that the situation remains fluid and potentially volatile. Consequently, caution is advised regarding MP Materials stock at this time.
