Photo: Peggy Greb, USDA

Introduction

Yesterday (Monday), the S&P 500 was up 1.0% and the Nasdaq was up 1.3% while the 10 pure-play rare earth stocks trading on U.S. stock exchanges were up 7% on the day.

Why The Disparity Between the Performance Of Rare Earth Metal Stocks And The Nasdaq?

Earlier this month (October 9th), China tightened its grip on the rare earths market by requiring foreign companies to obtain licenses to export products containing more than 0.1% of domestically-sourced rare earths, or are manufactured using China’s extraction, refining, magnet-making or recycling technology. The following day, Trump responded by announcing that the U.S. would be imposing an additional 100% on Chinese imports over and above the current 40% that is already in place, effective November 1st, and would also be imposing export controls on “any and all critical software.” on the same date. 

If Trump follows through with his intentions, investors fear that it could adversely affect the U.S. economy, which is still reliant on imported rare earth metals and, if China retaliates that could lead to an all-out trade war. 

Our Pure-Play Rare Earth Stocks Portfolio

The 10 rare earth metal stocks trading on U.S. stock exchanges soared as a result of the escalation in tension between China and the U.S. going up 46.7% as of last Friday, October 17th and that surge continued yesterday (Monday).

Below are the performances of those 10 stocks in 3 segments of activity - producers, developers and explorers - and the performances of each segment and its constituents yesterday, in descending order, MTD, and YTD, along with their market capitalizations, and countries of operation:

Producers
 

1. Lynas Rare Earths (LYSCF): up 15.3% on Monday; up 26.7% MTD; up 1,800% YTD
   • Country: Australia
   • Market Capitalization: $13.5B
2. MP Materials (MP): up 2.6% on Monday; up 23.6% MTD; up 391% YTD 
   • Country: U.S.
   • Market Capitalization: $14.7B

Sub Total Average: up 4.3% on Monday, up 24.0% MTD, and up 394% YTD

Developers
 

1. Arafura Rare Earths (ARAFF): up 24.1% on Monday; up 153.8% MTD; up 346% YTD
   • ​​Country: Australia
   • Market Capitalization: $902M
2. NioCorp Development (NB): up 19.7% on Monday; up 45.4% MTD; up 453% YTD 
   • ​​​​​Country: U.S.
   • Market Capitalization: $937M
3. USA Rare Earths (USAR): up 13.9% on Monday; up 83.8% MTD; up 137% YTD
   • ​​​​​​Country: U.S.
   • Market Capitalization: $3.1B
4. Liuka Resources (ILKAF): DOWN 4.6% on Monday; up 19.8% MTD; up 73% YTD
   • Country: Australia
   • Market Capitalization: $2.1B

 Sub Total Average: up 12.7% on Monday; up 65.3% MTD and up 192% YTD. Ucore Rare Earth Metals is excluded from the above constituents as it trades in Canadian dollars on the TSXV with the symbol UCU.

Explorers
 

1. Northern Minerals (NOURF): up 17.4% on Monday; up 33.3% MTD
   • ​​​​​​​Country: Australia
   • Market Capitalization: $294M
2. Mkango Resources (MKNGF): up 14.6% on Monday; up 12.2% MTD; up 66% YTD; up 589% YTD
   • ​​​​​​​​​​​​​​Countries: Poland & Malawi
   • Market Capitalization: $267M
3. Aclara Resources (ARAAF)(ARA.TO): up 10.4% on Monday; up 32.3% MTD; up 344% YTD
   • ​​​​​​​​​​​​​​Countries: Chile, Brazil & Peru
   • Market Capitalization: $902M
4. Vital Metals (VTMXF): No Change on Monday; up 8.7% MTD; up 250% YTD
   • ​​​​​​​​​​​​​​Country: Canada
   • Market Capitalization: $235M

​​​​​​​​​​​​​​​​​​​​​Sub Total Average: up 10.8% on Monday; up 25.2% MTD; up 539% YTD

Summary
 

In total, our Pure-play Rare Earth Stocks Portfolio was up 7.0% on Monday and is now up 34.7% MTD​​​​​​​ and 304% YTD