Despite geopolitical tensions, China’s rare earth producers have profitable first half
China’s rare earth producers have reported or anticipated hefty first-half profits, with Beijing’s use of the strategically critical minerals as leverage in trade relations with Japan and the United States not appearing to impede normal activity. The geopolitical factor – US President Donald Trump announced more than US$2 billion of domestic mining investment on Friday, widely viewed as…
China's rare earth producers reported strong first-half profits, with Beijing's strategic use of the minerals in trade relations with Japan and the United States not hindering their operations. The geopolitical factor, including US President Donald Trump's announcement of over US$2 billion in domestic mining investment, has contributed to higher product prices and the valuations of Chinese firms.
China Rare Earth Resources and Technology saw its first-half net profit increase 46.53% year-on-year to 237 million yuan, while Shanghai-listed China Northern Rare Earth Group's price-to-earnings ratio rose from 105.4 to about 58. Analysts believe the rare earth sector has significant growth potential due to the expansion of the AI supply chain and rising demand for hardware components.
Intensifying geopolitical pressures led to US President Trump imposing strict limits on defence procurement waivers for Chinese critical minerals in July 2020. Despite these measures, Chinese producers are expected to maintain strong earnings in the near term due to their advantages in processing, metallisation, alloying, magnet manufacturing, and scale economics.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
