Shares of Critical Metals Corporation (CRML) tumbled 6.79% in pre-market trading on Monday, as rare earth stocks faced significant pressure following developments in US-China trade negotiations. The decline comes amid a broader selloff in the rare earth sector, with several other companies experiencing notable losses.
The pre-market plunge in CRML's stock price appears to be directly linked to recent talks between top Chinese and U.S. economic officials. These discussions, which took place on the sidelines of the ASEAN Summit in Kuala Lumpur, have reportedly laid the groundwork for a potential trade deal between the two nations. U.S. Treasury Secretary Scott Bessent stated that the talks have eliminated the threat of 100% tariffs on Chinese imports, which were set to begin on November 1. More importantly for the rare earth sector, Bessent expects China to delay the implementation of its rare earth minerals and magnets licensing regime by a year.
This potential pause in China's rare earth export controls could significantly impact companies like Critical Metals Corporation and other players in the industry. The market reaction suggests that investors are reassessing the near-term outlook for rare earth companies, given the possibility of increased supply and reduced trade tensions. As U.S. President Donald Trump and Chinese President Xi Jinping prepare to meet later this week at the APEC summit in Gyeongju, South Korea, the rare earth industry and its investors will be closely watching for any further developments that could affect the sector's dynamics and stock valuations.
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