Rare Earth Stocks Pull Back! Morgan Stanley Report: How Will US–China Relations Affect?

Tiger_SG
10-14
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The rare earth market is back in turbulence.

At the start of trading, U.S.-listed rare earth stocks fell across the board: MP Materials -6.2%, USA Rare Earth -8.6%, United States Antimony -2%, and NioCorp -4.8%.

On Monday, JPMorgan announced a $1.5 trillion strategic investment plan, with up to $10 billion earmarked for critical minerals and frontier technologies.

What rare earth stocks to focus?


Meanwhile, Morgan Stanley’s latest report highlights that the interlinked dynamics of rare earths, AI, and tariffs are reshaping the competitive landscape between China and the U.S.

Morgan Stanley four scenarios: the future path of rare earths

Morgan Stanley describes the current U.S.–China relationship as entering a “strategic upgrade phase”, outlining four possible trajectories:

Scenario 1 (Base Case): Short-Term Thaw → Limited Agreement

No extreme tariff hikes; rare earth export licensing gradually normalizes; limited impact on the magnet industry.
Tariffs likely to stay around 20–45% through year-end.
After short-term volatility, room for recovery emerges — favoring high-quality + thematic hedging strategies.

Scenario 2: Tactical Escalation → Quick Pullback

Short-term tariff or licensing tightening, followed by a fast retreat due to high economic costs.
Temporary supply chain disruptions could turn into buy-the-dip opportunities.

Scenario 3: Prolonged Escalation → Deep Decoupling

Restrictions expand to semiconductors, EVs, and other key sectors.
Industry chain stress intensifies; defensive and localized assets outperform.
A-shares show stronger resilience than offshore Chinese stocks; valuation centers move lower.

Scenario 4: Rhetoric Escalation → Rapid Agreement

Both sides tighten first, then ease quickly — extreme measures are rolled back, tariffs drop to the lower end of the range, and negotiations broaden to new areas.
Risk appetite rebounds rapidly in the short term, but structural uncertainty lingers long-term.

💬 Discussion

  • Is this rare earth correction just a short-term adjustment or the start of a trend reversal?

  • During the “strategic upgrade” stage of U.S.–China relations, are rare earths a safe haven or a risk asset?

  • Over the next decade, could “AI × Rare Earths” become the real investment megatrend?

  • What’s your pick for rare earth stocks?

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Comments

  • HoldTheDoor
    10-15
    HoldTheDoor
    Rare earth stocks are shaky due to U.S.-China trade tensions. Prices dropped, like MP Materials (-6.2%) and USA Rare Earth (-8.6%). JPMorgan’s $1.5 trillion plan, with $10 billion for minerals, stirred things up. Morgan Stanley sees four scenarios: short-term calm, quick fights, long splits, or fast agreements. This dip’s likely short-term, but risky. AI and rare earths could be a big deal in 10 years. Watch MP Materials, USA Rare Earth, and Lynas. Check with grown-ups before investing!
  • Shyon
    10-15
    Shyon
    The recent pullback in U.S.-listed rare earth stocks looks more like a short-term correction than a trend reversal. With JPMorgan setting aside up to $10 billion for critical minerals, I see this dip as a buying opportunity. Rare earths remain essential for AI chips, EVs, and clean energy — so demand should stay strong. I’m watching $MP Materials Corp.(MP)$ and $USA Rare Earth Inc.(USAR)$ for potential rebounds once sentiment stabilizes.

    Morgan Stanley’s “strategic upgrade” view fits the current U.S.–China landscape. I’m also eyeing $LYNAS RARE EARTHS LTD(LYC.AU)$ & $VITAL METALS LTD(VML.AU)$ , which benefit from Western supply chain diversification.

    Looking ahead, “AI × Rare Earths” could become a major investment theme. These materials power everything from AI servers to EV motors. Despite volatility, I treat rare earths as a long-term thematic play, that underpins the next phase of technological & energy transformation.
    @Tiger_SG @Tiger_comments @TigerStars

  • Jackosen
    10-15
    Jackosen
    Pullback is just a sign of profit taking but there are now more buyers so it will provide a great buying opportunity   for those who believe the trade war will last longer.
  • Lanceljx
    10-15
    Lanceljx
    The rare-earth pullback looks like a short-term correction, not a full trend reversal. Supply remains tight and demand from EVs, defence and clean tech stays robust, though easing export tensions could cool prices temporarily.

    During the “strategic upgrade” in U.S.–China ties, rare earths are a hybrid asset — geopolitically defensive yet cyclical. They act partly as a hedge but still swing with global growth and policy shocks.

    Over the next decade, “AI × Rare Earths” could become a megatrend, as AI hardware, EV motors and data-centre magnets drive structural demand.

    My pick: MP Materials (MP) — the only major U.S. rare-earth miner with vertical integration and government backing. High risk, but long-term strategic value remains compelling.

    @TigerEvents @TigerClub @Tiger_SG @Tiger_comments @Daily_Discussion @TigerEvents

  • 北极篂
    10-15
    北极篂
    我认为这次稀土股的回调，更像是短期调整而非趋势反转。经历了数月的暴涨之后，市场需要时间去消化获利盘和情绪泡沫。尤其在特朗普最新的出口报复言论后，资金短暂避险是自然反应。但从根本面看，稀土依然是中美博弈的核心资源，美国不会放弃本土稀土产业的战略布局。


    在“战略升级”阶段，稀土其实是介于避风港与风险资产之间的特殊存在。它不像黄金那样纯粹防御，但在地缘紧张时期，却具备供应安全的重要性。当中国加强出口管控、美国推动自主开采时，稀土供应链就成为投资焦点。短线波动虽大，但长期逻辑仍稳。


    我个人认为，“AI × 稀土”是未来十年的潜在趋势。AI、芯片、电动车、无人机等领域，都离不开磁性材料与高性能电机的支撑，而这些都需要稀土元素。科技越进步，对稀土的需求反而越刚性。


    若要布局，我会优先关注MP Materials等具备上游资源与加工能力的企业，而非纯题材炒作型公司。分批建仓、耐心持有，也许正是穿越波动的最佳策略。
  • Tiger_SG
    10-20
    Tiger_SG
    Thanks for participating in my discussion. Your coins have been sent through the tiger coin center!
    Check them in the history - “community distribution“
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