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Dake Liu

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 diversifying the country’s rare earth supply chain away from China’s near-monopoly – has helped drive up product prices and also the valuations of listed Chinese firms.
Shenzhen-listed China Rare Earth Resources and Technology saw its first-half net profit surge 46.53 per cent year on year to 237 million yuan (US$35.1 million), the company said in an exchange filing on Friday.
Its price-to-earnings ratio, an indicator of investor expectations, was 636.88 in February and currently stands at around 254, still very high compared with the market average.
The same ratio for Shanghai-listed China Northern Rare Earth (Group) High-Tech, the nation’s largest producer, reached 105.4 in February and now stands at about 58.
China Northern has said it expects a first-half net profit of between 1.98 billion yuan and 2.06 billion yuan, representing year-on-year growth between 112.74 and 121.33 per cent.
“Rare earth prices have maintained a strong upwards trajectory driven by the rapid expansion of the AI supply chain and surging demand for hardware components,” said Guo Lingyu, an investment manager at Jianyuan Fund.
Adding that domestic regulatory policies had reined in exports, Guo said there was “even greater growth potential for the rare earth sector, supported by both structural supply constraints and accelerating downstream adoption across hi-tech”.


Intensifying geopolitical pressure saw Trump sign an executive order on July 20 that imposed strict limits on defence procurement waivers for Chinese critical minerals. It was the latest in a series of US measures targeting China’s rare earths that began with the signing of an executive order in December 2017.
That order, entering into force during Trump’s first White House term, formally designated rare earths and other materials as critical minerals and directed the development of a federal strategy to reduce dependence on supplies from foreign countries, particularly China.
Data from the Association of China Rare Earth Industry trade group showed its rare earth price index – which compares daily transaction data with prices from the whole of 2010 – climbed 31.7 per cent since August 2025.
Overseas policy moves spurred by geopolitical tensions have done little to dent the near-term earnings power of Chinese producers, according to analysts.
“On Western de-risking, I do not think it is materially eroding Chinese producers’ earnings power in the near term,” said Dennis Ip, regional head of power, utilities, renewables and environment research at Daiwa Capital Markets.
He said China’s advantages extended far beyond mining, spanning “separation, metallisation, alloying, magnet manufacturing, customer qualification and scale economics”.
“Western projects are strategically important … but the buildout is slow, capital-intensive and still faces midstream and downstream constraints,” Ip said.
He said that rather than weakening Beijing’s grip, escalating American pressure might inadvertently consolidate it.
“In the short to medium term, de-risking may actually reinforce China’s pricing power because downstream customers still need Chinese processing and magnet capacity while supply security becomes more valuable,” Ip said.


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Rare earths

Despite geopolitical tensions, China’s rare earth producers have profitable first half

Rare earths are loaded on to a ship at a port in Lianyungang, Jiangsu province. Photo: AFP 

A bulldozer at a rare earths mine in Nancheng county, Jiangxi province. Photo: Reuters

China resumes gallium exports to Japan after 4-month pause as rare earth magnet sales surge

A block with the symbol, atomic number and mass number of gallium is seen in this illustration taken February 6, 2026. Photo: Reuters

A rare earth mine in Baotou, Inner Mongolia Autonomous Region of China. Photo: VCG via Getty Images

China’s CATL to invest US$4.4 billion in mining arm to secure EV battery supply chain

CATL reported a net profit of 20.74 billion yuan in the three months to March, up 48.5 per cent from the previous quarter and beating analysts’ estimates. Photo: AFP

CATL’s investment arm will integrate existing mining assets, pursue high-quality mineral projects at home and abroad, and safeguard supply of raw materials. Photo: Reuters

Japan feels the squeeze as China’s rare earth magnet exports only partly recover

Workers transport soil containing rare earth elements for export at a port in China’s eastern Jiangsu province. Photo: Reuters

China’s Zijin Mining outlook raised to positive on stronger output and cost edge: S&P

Zijin Mining’s outlook has been raised from “stable” to “positive”. Photo: Shutterstock

Zijin is targeting production of 1.5 million to 1.6 million tonnes of copper and 130 to 140 tonnes of gold in 2028. Photo: Handout

Australia orders Chinese investors to divest from rare earths company Northern Minerals

Northern Minerals is developing a heavy rare earths project in Western Australia, at a time when the sector has become increasingly strategic for its uses in green energy and defence. Photo: Handout

Australian treasurer Jim Chalmers in Canberra on Wednesday. Photo: AAP/dpa

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Rapid expansion of AI supply chain has given rare earth prices a strong upwards trajectory, analyst says


Rapid expansion of AI supply chain has given rare earth prices a strong upwards trajectory, analyst says.


Despite geopolitical tensions, China’s rare earth producers have profitable first half

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Rapid expansion of AI supply chain has given rare earth prices a strong upwards trajectory, analyst says

Rapid expansion of AI supply chain has given rare earth prices a strong upwards trajectory, analyst says