Rare-earth stocks in China soar after visit by Xi Jinping spotlights US dependence on key element in hi-tech products

Companies related to rare earth elements surged on Tuesday, with many extending gains from the previous session, after Xi’s visit brought the industry into the spotlight and highlighted its strategic importance with the US.

By end of trading on Tuesday, a gauge of 38 companies in China related to rare earths rose 6.7 per cent. Meanwhile, in Hong Kong one stock in particular rewarded attentive traders:

China Rare Earth Holdings, which manufactures and wholesales products through its subsidiaries, skyrocketed 108 per cent to HK$0.77 by market close.

Explainer: Used from iPhones to guided missiles, does China’s dominance in rare earths hold potential leverage in trade war?

Rare earths are a group of 17 elements, many of which are crucial to the production of hi-tech products, with magnets made from the minerals used in electric cars, earphones and hard drives in computers, among other things.

China accounts for 90 per cent of global rare earths production, with its exports making up around 80 per cent of global demand. The minerals are among the few items excluded from the US’ plans to put tariffs on almost all remaining goods exported to the US.