Shares of Critical Metals Corporation (CRML) plummeted 13.31% in pre-market trading on Monday, as investors reacted to news of a potential trade deal between the United States and China that could significantly impact the rare earth metals sector. The sharp decline comes amid a broader selloff in rare earth stocks, with several companies in the sector experiencing substantial drops.
The downturn appears to be triggered by reports of progress in US-China trade talks, which could lead to a pause in escalating tariffs and a potential delay in China's implementation of rare earth export controls. According to U.S. Treasury Secretary Scott Bessent, discussions on the sidelines of the ASEAN Summit have resulted in a framework that could prevent the imposition of 100% tariffs on Chinese imports, which were set to begin on November 1. Moreover, Bessent indicated that China might postpone its rare earth minerals and magnets licensing regime by a year.
This development has sparked concerns among investors about the future pricing power and market dynamics of rare earth companies like Critical Metals Corporation. With China processing more than 90% of the world's rare earths and magnets, the potential pause in export controls could ease fears of supply disruptions that had previously boosted the sector this year. As traders reassess the sector's outlook in light of these potential trade developments, the competitive landscape for companies like Critical Metals Corporation may be shifting, contributing to the significant downward pressure on its stock price. The upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the APEC summit in Gyeongju, South Korea, later this week is expected to provide more clarity on the situation, and investors will be closely watching for any further developments that could affect the rare earth industry.
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