Rare Earth Stocks Lose 1 Trillion Won in a Day... Government Funds Shift to Competitors

Shares of MP Materials Corp. (MP) plunged 8.78% on the New York Stock Exchange on the 26th, closing at $63.44. Trading volume topped 10.55 million shares, wiping out roughly $900 million in market capitalization in a single day—about KRW 1.2 trillion.

The drop followed news that the U.S. Department of Commerce had pledged a $1.6 billion support package to competitor USA Rare Earth, stoking concerns that government aid within the rare earths sector would be spread more thinly, according to Barron’s. Analysts have also pointed out that MP Materials has been grappling with ongoing losses due to weak earnings and rising costs, and recent reports warning of further declines after earnings misses have heightened the negative outlook.

Based at the Mountain Pass mine in California, MP Materials is effectively the only large-scale rare earths producer in the U.S. The company is pursuing vertical integration—from mine development to the separation of neodymium and praseodymium, and the domestic production of magnets—aiming to become a core supplier for defense and electric vehicle supply chains. However, its strategic shift to reduce dependence on China and its heavy capital investments have significantly increased short-term financial pressures, according to a company statement.