Why Are Rare Earth Stocks Falling When Prices Keep Rising?
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Here is a question that should be harder to answer than it is: China still controls the rare earth spigot, the latest Trump-Xi summit did nothing to loosen its grip, Japan is about to run out of yttrium, Washington has put a $110/kg floor under NdPr, and Western buyers are paying anywhere from 5x to 346x the Chinese price for heavy rare earths.
So why are rare earth stocksdownon the year? That is the question Canaccord's critical minerals team led by Reg Spencer asks in an overnight note titled "Rare Earths: Equity disconnect from strong market fundamentals", and the answer is blunt: We have been tracking the rare earth theme sincelong before China started rationing exports to the Westin late 2024, and back in July 2025 we laid out"The Coming Rare Earth Revolution And How To Profit", flagging MP Materials as the stock best positioned to benefit.
A few hours later the Pentagon announced its MP deal, and well we allowed ourselves a modest victory lap: Fifteen months later, MP trades at $40.17, about half of Canaccord's $82 target.
So what happened? Canaccord's chart below shows the problem in one picture.
Chinese NdPr (black) and Rotterdam NdPr (dark blue) have converged andclimbed steadily all year, with the Western price now above $110/kg.
Meanwhile the REMX ETF (light blue) peaked in May and has sinceslid from above $100 to the high-$50s.
On the producer side, Lynas, MP, USA Rare Earth and Iluka are all deep in the red, and even China Northern Rare Earth and Shenghe are lower on the year.
Developers did a bit better on average, mostly thanks to Viridis (VMM), which is still up well over 50% on the year.
Strip that out and the picture is grim: Hastings is down roughly two-thirds, St George about half, and Arafura and Brazilian Rare Earths 35-50%.
Canaccord's verdict: "We question how equities have performed so poorly YTD despite strong underlying market fundamentals." Those fundamentals include recent sector M&A, direct government support, a scarcity of Western supply and "ex-China NdPr pricing up 23% YTD." Start with the most important structural change of the past year.
As we reported when theDepartment of Defense set a price floorlast August, Washington has moved from financing Western supply to underwriting its economics.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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