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Rare earth stocks climbed in the US after Beijing tightened its control over these critical materials, used in the vast majority of electronic devices, from smartphones and cars to ballistic missiles.
Across the Atlantic, European markets opened in a mixed mood while the Middle East peace deal progresses, brokered by US President Donald Trump.
With investors also watching political uncertainty in France, the pan-European STOXX 600 was up around 0.1% at 11.45 CEST, and Paris’ CAC 40 also gained 0.1%.
Frankfurt’s DAX and London’s FTSE 100 both slipped 0.1%, after an earlier rise for the DAX.
“The FTSE 100 was stuck in the mud as the rest of Europe ploughed ahead at the end of the trading week,” said Russ Mould, investment director at AJ Bell.
“Strength in consumer stocks and utilities was offset by weakness in miners and healthcare,” he said — adding: “it was also notable that defence stocks were being sold down, including Babcock, which has rocketed this year.”
In other news, oil prices were down on Friday morning. The US benchmark crude cost around 0.4% less than at the previous close, and traded at $61.26 per barrel at around 11.45 CEST. The international benchmark Brent lost 0.49% and cost $64.90 per barrel at the same time.
Gold prices also rose after hitting new records recently, trading at $4,018.00 on Friday morning in Europe.
US futures were up slightly, the euro gained against the dollar at $1.1575, and the greenback slipped against the Japanese yen, to ¥152.7950. The British pound also fell against the dollar and cost $1.3290.
Rare earths companies gained overseas
As mining stocks led losses in Europe on Friday amid developments in Beijing, the STOXX Europe Basic Resources index shed 0.78%.
This follows a rally in the US, where rare earth stocks rose considerably after China announced that it would tighten control over its exports of these materials.
The country is dominating the market for rare earths. The world’s second-largest economy accounts for 70% of the global supply of these assets that are hugely significant for defence and technological infrastructure.
Following the news, investors in the US placed their hopes on American alternatives. US rare earth and critical mineral miners’ share prices surged on Thursday, partially due to market speculation that Washington will invest more in building out a domestic supply chain.
Many of these companies have seen their prices increase for months now, with several doubling or tripling since the beginning of the year.
USA Rare Earth Inc., a firm building a domestic rare earth magnet supply chain, gained nearly 15% on Thursday. Since January, it has risen 151%.
MP Materials Corp, an American rare-earth materials company headquartered in Las Vegas, Nevada, also gained more than 2.4% on Thursday, while it is up 341% since January.
Another company, Denver-based Energy Fuels Inc., gained 9.4%, bring its year-to-date rise to 284%.
NioCorp Developments, which benefits from Pentagon support, gained more than 12%, Rare Element Resources Ltd gained more than 10%, and Texas Mineral Resources Corp. gained 9.6% on Thursday.
Meanwhile, Australian rare-earth mining company Lynas Rare Earths lost nearly 3.8% in the Asian trade, and Australia’s Iluka Resources lost 3.22%.
Chinese Shenghe Resources, a partly state-owned rare earths mining and processing company listed on the Shanghai stock exchange, lost 5%.
Beijing’s measures mean that companies need to apply for a licence to export products containing certain Chinese-sourced rare earth metals.