Highlights

• MP Materials, USA Rare Earth, and Critical Metals dropped 7-14% in late October on U.S.-China trade truce rumors, despite strong fundamentals including DOD contracts and full project funding.
• America's rare earth supply chain strategy is a long-term national security priority, not a short-term political play, with emerging domestic integration from mining to magnet production.
• China's 85-90% control of rare earth refining capacity remains the critical bottleneck, requiring direct U.S. government intervention through subsidies and offtakes to achieve true supply chain resilience.

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The MarketBeat headline “Don’t Fear the Dip: Rare Earth Stocks May Rebound Fast (opens in a new tab)” captured the Halloween timing perfectly—markets trembling, traders panicking, and long-term investors quietly reaching for their shopping lists. Between October 24–28, shares of MP Materials (NYSE: MP), USA Rare Earth (NASDAQ: USAR), and Critical Metals Corp. (NASDAQ: CRML) plunged between 7% and 14%, not because of weak fundamentals but because of whispers of a U.S.–China trade truce. The rumor—if true—suggests a temporary pause in tariffs and export controls, yet the selloff ignored one stubborn reality: America’s rare earth strategy isn’t about quarterly politics; it’s a generational national security play.

Rare Earth Exchanges (REEx) has suggested many times that the United States and China have no choice but to do rational deals, calm markets down, and stabilize.  Frankly, both economies have trouble, more than either nation is letting on.  Let’s start with China and its’ overproduction crisis, particularly in sectors like electric vehicles (EVs) and solar panels.  The U.S. has its own problems, and the resurgence of rare earth element and critical mineral supply chains could have a profoundly positive impact.

Data, Not Drama: The True Fundamentals

It certainly seems true that the Department of Defense’s long-term contracts with MP Materials—anchored by a 10-year magnet offtake agreement and price floors—provide insulation against short-term market noise. USA Rare Earth remains fully funded for its Stillwater magnet facility (although they may face other challenges),  while Critical Metals is advancing its Tanbreez project in Greenland with $50 million in fresh capital. These facts are verifiable and align with publicly available filings.

Where MarketBeat veers slightly into the realm of speculative optimism is in its tone—the claim that the “sell-off may be a Halloween treat” is emotionally charged, not empirical. While technically possible, short-squeeze scenarios rely on unpredictable timing and sentiment. Nonetheless, the core thesis—that long-term structural demand from EVs, renewables, and defense dwarfs near-term volatility—is sound. REEx buys into that premise.

The Bigger Picture: When Fear Discounts the Future

From a rare earth supply chain perspective, this correction was almost textbook. Political noise triggered technical selling, creating valuation windows for long-term investors.  And it does not help that President Trump has, on more than one occasion, publicly touted that we’ll have a surplus of rare earth magnets within a year. That’s just not the case.

The U.S. magnet supply chain—from Mountain Pass to Stillwater to Greenland—is still very nascent but emerging. The MarketBeat analysis rightly highlights a shift from extraction to integration, echoing Washington’s industrial policy trajectory.

Yet the piece misses one global context: China’s export control expansion, which further cements Western urgency. For all its upbeat phrasing, the article underplays the fact that geopolitics—not valuation metrics—are the primary driver of rare earth equities.

A Steep Climb

Despite aggressive U.S. policy action and billions in announced investment, true rare earth supply chain resilience remains years away—largely because of a single chokepoint: refining. Mining rare earth ore is no longer the hardest part; it’s transforming those ores into separated oxides and metals at a commercial scale that continues to bottleneck the West.

China still controls roughly 85–90% of global refining capacity, a dominance built over decades of state-backed subsidies, integrated logistics, and environmental tolerance levels that Western nations currently can’t match. While projects in the U.S., Australia, and Europe are advancing, most rely on Chinese processing intermediates or technology licenses.

Without direct U.S. government intervention—through loan guarantees, price floors, and long-term offtake subsidies for refiners—private capital will struggle to justify the risk of competing against Beijing’s vertically integrated incumbents.

Conclusion

In short, until Washington finds a way to underwrite the midstream, resilience will remain more aspiration than achievement.  And yes — the companies that capitalize on this expanding wave of industrial policy and actually deliver results stand to become the big winners, translating government strategy along with market reaction into tangible market leadership.

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