Rare earth supply chain competition

What happened: USA Rare Earth (USAR) and MP Materials (MP) are key players in the U.S. rare earth supply chain. On June 4, Cantor Fitzgerald raised USAR's price target to $40, citing potential growth. On June 28, MP sued USAR, alleging misappropriation of proprietary technology. USAR dismissed the lawsuit, calling it meritless. Meanwhile, Iluka Resources signed an 18-year rare earth supply deal with VHM. G7 leaders agreed to reduce rare earth reliance on non-partner countries, boosting MP and USAR stocks. Energy Fuels secured a $725 million U.S. backing for rare earth production.

Market impact: The rare earth sector is experiencing increased competition and geopolitical attention. USAR and MP are at the forefront, with their stocks reacting to legal disputes and geopolitical developments. The G7's plan to reduce dependence on China-dominated supply chains has driven up rare earth stocks. The lawsuit between MP and USAR highlights the intense competition in the U.S. rare earth supply chain.

What to watch next: On August 12, USAR is set to report Q2 earnings, which could provide insights into its growth prospects and the lawsuit's impact. On September 15, MP is due to report Q3 earnings, offering updates on its production and legal disputes. The U.S. government's progress on its critical minerals strategy, following the G7 agreement, will also be crucial to watch.