Despite the preliminary agreement in the US-China trade dispute, the supply of rare earths remains a critical issue, providing investors with interesting investment opportunities. Here are some of the most interesting stocks and ETFs in the field of rare earths:
Stocks
Lynas Rare Earths: Lynas is an Australian mining company specializing in the exploration, development, mining, and processing of rare earths. The stock has shown strong price movements in the past and is one of the most recognized in the sector.
MP Materials: With a market capitalization of around $5 billion, MP Materials is the largest Western company in the field of rare earths. It produces rare earth concentrate and refined rare earth oxides.
Jl Mag Rare Earth: The Chinese producer Jl Mag Rare Earth recently received approval for the export of rare earths, leading to a price increase. This could be an interesting point for investors looking to bet on Chinese production.
ETFs
VanEck Rare Earth and Strategic Metals ETF (REMX): This ETF invests in companies that generate at least 50% of their revenues from rare earths or strategic metals. It offers broad diversification across various producers and refineries.
Other ETFs: There are also ETFs that focus on “Disruptive Materials” or “Essential Metals,” which play a role in forward-looking areas like e-mobility or renewable energy. These also provide a way to invest in the rare earth sector.
Opportunities and Risks
- Opportunities: The rising demand for rare earths, particularly in areas such as e-mobility and renewable energy, offers long-term growth opportunities.
- Risks: Geopolitical tensions, particularly between the U.S. and China, can affect supply chains and lead to price volatility. Additionally, there are risks from oversupply and macroeconomic headwinds.
Overall, stocks and ETFs in the field of rare earths provide interesting investment opportunities, but investors should carefully weigh geopolitical and economic risks.