China US Trade Deal Sparks Sharp Pullback in Lynas Rare Earths Ltd After Stellar Price Surge
Highlights:
Lynas Rare Earths Ltd (ASX: LYC) shares fell 19% in the past week (at the time of writing) after soaring 133.5% year-to-date, as investors reacted to China easing rare earth export restrictions.
China and the U.S. reached a trade pact, with Beijing suspending export curbs on key materials like rare earths, gallium, and graphite in exchange for Washington pausing new tariffs.
The pullback in Lynas stock reflects profit-taking and valuation correction after months of sharp gains, as markets anticipate greater supply stability and increased competition in the rare earth sector.
Lynas Rare Earths Ltd (ASX: LYC) has experienced a turbulent week in the markets — and the trigger lies far beyond Australia’s shores. Following news that China will suspend additional export controls on rare earth metals as part of a major trade pact with the United States, Lynas shares tumbled 19% in the past week (at the time of writing) after an extraordinary 133.5% year-to-date rally.
The stock had previously soared on the back of fears about global supply chain disruptions and China’s dominance in rare earth processing. However, Beijing’s latest move to ease restrictions has swiftly altered investor sentiment.
China–US Trade Truce Brings Market Shift
According to the White House, China will lift export curbs on critical materials including rare earths, gallium, germanium, antimony, and graphite — rolling back restrictions imposed in April 2025 and October 2022. In return, Washington will extend a pause on several reciprocal tariffs and scrap plans for a 100% levy on Chinese exports previously set for November.
The breakthrough followed the first face-to-face meeting between U.S. President Donald Trump and Chinese leader Xi Jinping during Trump’s second term. Both sides framed the deal as a step toward stabilising relations after years of escalating trade friction.
Beijing also halted broad limits on rare-earth magnets in exchange for the U.S. softening its stance on Chinese tech firms. Additionally, the U.S. will halve a fentanyl-related tariff from 20% to 10%, while China pledged to resume U.S. soybean imports — purchasing 12 million metric tons this season and at least 25 million tons annually over the next three years.
Lynas Faces Market Reality After Exceptional Growth
While the easing of export curbs is a positive signal for global supply stability, it has dampened demand for non-Chinese producers like Lynas. The company had benefited from the perception that China’s tight controls would drive buyers toward alternative sources. Now, with Beijing loosening its grip, investors are questioning whether Lynas’s meteoric rise was overextended. The 19% pullback reflects profit-taking and valuation adjustments after months of steep gains.
What Lies Ahead for Lynas
Despite the recent correction, Lynas remains one of the world’s most significant non-Chinese rare-earth suppliers. Analysts say its long-term prospects hinge on how effectively it can expand processing capacity, secure new contracts, and reduce costs amid rising competition. For now, the market correction underscores a broader truth: even strong fundamentals can buckle under geopolitical shifts. After a year of exuberant gains, Lynas’s latest slide appears to be a reality check following an extraordinary high-price growth run.
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China US Trade Deal Sparks Sharp Pullback in Lynas Rare Earths Ltd After Stellar Price Surge
Highlights:
Lynas Rare Earths Ltd (ASX: LYC) has experienced a turbulent week in the markets — and the trigger lies far beyond Australia’s shores. Following news that China will suspend additional export controls on rare earth metals as part of a major trade pact with the United States, Lynas shares tumbled 19% in the past week (at the time of writing) after an extraordinary 133.5% year-to-date rally.
The stock had previously soared on the back of fears about global supply chain disruptions and China’s dominance in rare earth processing. However, Beijing’s latest move to ease restrictions has swiftly altered investor sentiment.
China–US Trade Truce Brings Market Shift
According to the White House, China will lift export curbs on critical materials including rare earths, gallium, germanium, antimony, and graphite — rolling back restrictions imposed in April 2025 and October 2022. In return, Washington will extend a pause on several reciprocal tariffs and scrap plans for a 100% levy on Chinese exports previously set for November.
The breakthrough followed the first face-to-face meeting between U.S. President Donald Trump and Chinese leader Xi Jinping during Trump’s second term. Both sides framed the deal as a step toward stabilising relations after years of escalating trade friction.
Beijing also halted broad limits on rare-earth magnets in exchange for the U.S. softening its stance on Chinese tech firms. Additionally, the U.S. will halve a fentanyl-related tariff from 20% to 10%, while China pledged to resume U.S. soybean imports — purchasing 12 million metric tons this season and at least 25 million tons annually over the next three years.
Lynas Faces Market Reality After Exceptional Growth
While the easing of export curbs is a positive signal for global supply stability, it has dampened demand for non-Chinese producers like Lynas. The company had benefited from the perception that China’s tight controls would drive buyers toward alternative sources. Now, with Beijing loosening its grip, investors are questioning whether Lynas’s meteoric rise was overextended. The 19% pullback reflects profit-taking and valuation adjustments after months of steep gains.
What Lies Ahead for Lynas
Despite the recent correction, Lynas remains one of the world’s most significant non-Chinese rare-earth suppliers. Analysts say its long-term prospects hinge on how effectively it can expand processing capacity, secure new contracts, and reduce costs amid rising competition. For now, the market correction underscores a broader truth: even strong fundamentals can buckle under geopolitical shifts. After a year of exuberant gains, Lynas’s latest slide appears to be a reality check following an extraordinary high-price growth run.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au