The trade war between the US and China is intensifying, with investors engulfing rare earth mineral stocks MP Materials (MP) 21.65%))the only rare earth mine and processing facility in the United States. As of 11:25am ET, MP Materials stocks have skyrocketed 22.7%, S&P 500 (^gspc 0.58%)) It jumped to 1.1%.
The only opportunity to buy an American (a type)
Throughout the morning, reports have emerged suggesting that President Donald Trump plans to issue an executive order that allows the United States to begin stockpiling rare earth minerals. As a result, MP material is bright on investors’ radar as it operates Mountain Pass, the only rare earth mining asset in the United States.
Last week, China halted exports of rare earth minerals. This represents a devastating blow to a variety of industries that rely on rare earth minerals to manufacture their products, such as semiconductors, electric vehicles, and defense. Approximately 70% of US imports of rare earth minerals come from China, the world leader in the production of these highly popular minerals.
Is it time to power your portfolio with MP materials?
MP materials are obvious stock considerations in light of the potential announcement of an executive order that allows for stockpiling of rare earth minerals, but the situation is more subtle than it appears. MP Materials sells rare earth minerals intensively to Chinese customers.
In fact, we have identified the following risk factors for 10-K: “Changes in China’s political environment and policies, changes in export policies, interpretations of China’s export policies and rare earth production, or imports of rare earth raw materials could have a negative impact on our financial condition and operational outcomes.”
Developments in rare earth minerals are changing rapidly, with more news coming up. At this point, only investors with high thresholds due to risk and volatility should consider the position of MP material.
