USA Rare Earth (USAR) Soars 13% on US-China Deal Uncertainties

USA Rare Earth Inc. (NASDAQ:USAR) is one of the 10 Stocks With Insane Returns Right Now.

USA Rare Earth rebounded on Wednesday, soaring 13.05 percent to finish at $22.57 apiece, as investors resorted to bargain-hunting while repositioning portfolios amid uncertainties over a rare earth deal between the US and China.

The rally was a bounce from seven straight days of volatility and losses that easily slashed the company’s share price by 25 percent, supported by the lack of concrete developments on rare earths between the US and China.

USA Rare Earth’s magnet facility in Stillwater, Oklahoma. Photo from the USA Rare Earth website

Last week, President Donald Trump met with his Chinese counterpart, Xi Jinping, to discuss key areas to resolve and work on, but developments on rare earths made little progress.

For USA Rare Earth Inc. (NASDAQ:USAR), easing of Chinese restrictions and any potential resolution between the two countries will generally be detrimental to growth, since the company has been largely benefiting from Washington’s push to secure a domestic supply chain for rare earths and critical minerals.

If tensions ease and Chinese supply becomes more accessible to the global market, concerns could emerge over reduced urgency for domestic sourcing.

In other news, USA Rare Earth Inc. (NASDAQ:USAR) last month successfully acquired rare earth miner Serra Verde Group for $2.8 billion.

Serra Verde owns the Pela Ema rare earth mine and processing plant in Goiás, Brazil, and will be acquired for a combination of $300 million cash and more than 126.8 million USAR shares.

The transaction is expected to close in the third quarter of the year, subject to customary closing conditions and regulatory approvals.

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