China Approves Certain Export License Applications, Global Rare Earth Stocks Surge

TradingKey - On the evening of Saturday, June 7, China's Ministry of Commerce announced that it has approved a certain number of rare earth export applications in compliance with the law. This news sparked a significant rally in related stocks on Monday. 

By the close of trading, China Rare Earth Holdings' Hong Kong-listed shares surged by 60%, while A-shares climbed 4.9%. JL Mag Rare-Earth's Hong Kong shares rose 1.74%, with its A-shares gaining 2.2%. China Northern Rare Earth's A-shares increased by 2.95%. 

In the US market, MP Materials, identified by Morgan Stanley as a top rare-earth stock amid shortages, rose over 2% in pre-market trading.

A spokesperson from the Ministry of Commerce stated on Saturday that rare earth materials have dual-use military and civilian applications, and implementing export controls aligns with international practices. As industries such as robotics and new energy vehicles develop, global demand for medium and heavy rare earths for civilian use continues to grow. 

China reviews export license applications for rare earth materials in accordance with the law and has approved certain compliant applications.

Previously, following the onset of the US-China tariff war in early April, China announced export restrictions on seven rare earth products as a countermeasure to the high tariffs imposed by the US. These restrictions have severely impacted some global industries; several European auto parts factories were forced to halt production last week, and European semiconductor companies warned that they might have to do the same within weeks if the restrictions persist.

Despite these export limitations, data from China's General Administration of Customs released on Monday showed that China's rare earth exports in May reached 5,864.6 tons, a 23% increase from the previous month, and the highest level in a year.

New trade negotiations between China and the US are set to take place in London on Monday. Analysts suggest that rare earths and other critical minerals remain key bargaining chips for China.