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Investing.com-- Chinese rare earth mining and processing stocks fell on Friday after Beijing flagged plans to begin granting more export licenses for controlled materials, amid improving trade relations with the United States.
Chinese ministers also downplayed European concerns over rare earth export restrictions, stating that Europe’s needs will be met if applications were submitted.
Hong Kong shares of China Nonferrous Mining Corp Ltd (HK:1258) and Jl Mag Rare Earth Co Ltd (HK:6680) fell between 2% and 3%. Mainland-listed rare earth majors China Northern Rare Earth Group High-Tech Co Ltd (SS:600111), Yongxing Special (SZ:002756), and Rising Nonferrous Metals Share Co Ltd (SS:600259) fell between 0.4% and 5%.
China’s commerce ministry said it was reviewing export licenses of controlled materials after the U.S. earlier this week lifted some chip export restrictions against Beijing.
Controlled materials largely refer to rare earth and magnetic materials, of which China is the world’s biggest producer.
The country had severely curbed its export of rare earth earlier this year, amid a bitter trade war with the United States. But China was seen issuing new export licences to local rare earth firms in late-June, after Washington and Beijing agreed to a framework trade deal earlier in the month.
Fears of tighter Chinese rare earth supplies had boosted stock prices in the sector, on bets that tighter supplies will fuel higher prices for the materials. But these gains were seen steadily coming unwound since late-June.
China also flagged openness for more trade cooperation with the U.S., which could herald a further loosening in export restrictions.
Shares of Australia’s Lynas Rare Earths Ltd (ASX:LYC), the biggest producer of the materials outside China, fell 1.4% on Friday.