Rare Earth Stocks Are Trading Lower Wednesday: What's Going On?

Rare earth mineral-related stocks are trading lower Wednesday. Earlier this week, the US and Australia signed a deal that would boost supplies of rare earths and other critical minerals.

MP is feeling the pressure from bearish momentum. View the charts here.

What To Know: According to the BBC, the US and Australia signed an agreement aimed at strengthening supply chains for rare earths and other critical minerals as the Trump administration seeks to reduce China's dominance in the market.

Australian Prime Minister Anthony Albanese said the deal would support a pipeline of $8.5 billion in "ready-to-go" projects to expand Australia's mining and processing capacity. The framework includes $1 billion in joint investments by both countries in projects located in the US and Australia over the next six months.

The US plans to invest in a 100-tonne-per-year advanced gallium refinery in Western Australia and provide up to $2.2 billion in financing for critical mineral projects through its Export-Import Bank.

Australian rare earth mining companies saw gains Tuesday following the announcement. Perth-based Arafura Rare Earths rose about 7.7%, while Iluka Resources gained more than 3%. Lynas Rare Earths, which previously received a contract from the US Defense Department for a Texas-based project, also traded higher on the news.

Shares of MP Materials Corp. (NYSE:MP), Northern Dynasty Minerals, Ltd. (AMEX:NAK), Trilogy Metals Inc. (AMEX:TMQ), Texas Mineral Resources (OTC:TMRC) and USA Rare Earth, Inc. (NASDAQ:USAR) are all moving lower today. The weakness may reflect investor rotation out of US-based rare earth stocks after the initial surge in Australian miners, as well as expectations that expanded global supply from the new agreement could pressure prices and reduce short-term margins across the sector.

China currently accounts for roughly 70% of global rare earth mining and 90% of processing capacity. The new deal marks an effort by the US and Australia to expand production and reduce reliance on Chinese supply chains.

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Price Action: At the time of writing, MP stock is trading 8.53% lower at $67.79, Northern Dynasty stock is trading 8.77% lower at $1.76, Trilogy shares are trading 13.94% lower at $4.78, TEXAS MINERALS stock is trading 19.72% lower at $1.27 and USA Rare Earth shares are trading 11.39% lower at $23.65, according to data from Benzinga Pro.

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