Rare Earth Stocks Keep Rising

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Rare Earth Stocks Keep Rising

Will Rare Earth Stocks Keep Rising?

Geopolitics continue to shape the financial and economic trends this year. This also includes the companies that are involved in the processing and mining of rare earth elements.

The ongoing trade between China and the USA has also raised the prices of these rare earth minerals. This also increased the share prices of the companies involved in mining.

Rare Earth Etfs Post Double-Digit Growth

One good example is the VanEck Rare Earth and Strategic Metals ETF, which has almost doubled in 2025. In fact, this ETF is up by 104% which is way higher than the returns from the S&P 500.

Sprott Critical Materials ETF is another ETF that is also up by 94% this year. Meanwhile, the Invesco DB Base Metals Fund has only gained 12% so far, and it includes zinc, aluminum, and copper.

So, it's clear that the prices of rare earth minerals have increased tremendously. In fact, even the related companies and ETFs have reached new highs.

All of this is happening because of China's response to the high tariffs from the USA. On the one hand, the US has imposed heavy tariffs on China. On the other hand, China has announced strict export controls for these rare earth minerals.

Right now, around 70% output of the rare earth minerals comes from China. In addition, around 90% processing of these minerals is also done in China.

So, it's clear that China remains a big player in the rare earth minerals. So, if China continues to impose strict measures on the export of these minerals, then the prices of rare earth stocks will continue to rise.

Even if the US decides to build up its capacity for making its own rare earth minerals, it would still take a few years. So, the way things look right now, the prices of rare earth minerals and the related stocks will keep rising as long as US-China tensions don't dissipate.

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