MP Materials Surges as Rare-Earth Tensions Escalate Between U.S. and China

Shares of MP Materials (MP) rallied 13% on Friday following heightened geopolitical tensions between the U.S. and China over rare-earth elements. The stock's rise reflects its strategic importance after a $400 million investment from the U.S. Department of Defense in July, which included commitments to purchase future output at price floors.

President Trump's threat to increase tariffs on Chinese imports and potentially cancel a meeting with President Xi Jinping came in response to China's new export controls on rare-earth elements. The Chinese Ministry of Commerce now requires foreign entities to obtain licenses for exporting rare-earth products sourced from China, which dominates 70% of global supply, particularly in refining.

MP Materials, as a key U.S. supplier of these critical materials used in industrial and military applications, benefits from market volatility driven by supply chain uncertainties. The stock has become a barometer for geopolitical risk in the rare-earth sector.