Chart of Day: MP Materials (MP)
Rare earth stocks are on the move.
All after the Biden Administration banned exports of high-bandwidth memory chips (HBM) used in artificial intelligence applications.
As noted by Reuters, “The move is one of the Biden administration’s last large-scale efforts to stymie China’s ability to access and produce chips that can help advance artificial intelligence for military applications. The package includes curbs on China-bound shipments of high bandwidth memory chips, critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export curbs on chipmaking equipment made in countries such as Singapore and Malaysia.”
About two dozen Chinese semiconductor companies will now be added to the US list that restricts access to US technology.
As a result, China will now ban rare earth metals to the US including gallium, germanium, antimony, and super-hard materials. Citing “safeguarding national security and interests,” China’s ministry also “requires a stricter review of end-usage for graphite dual-use items.” That potentially limits US access to a common coating material used in everything from power cables to nuclear reactors, as noted by ArsTechnica.com.
With that, it comes as no surprise that MP Materials (MP) is pushing higher.
Last trading at $23.43, MP could move even higher because it owns the Mountain Pass rare earth mine and processing facility here in the United States. Helping, MP recently said, “The MP team delivered record production of rare earth concentrate and NdPr oxide in the third quarter,” said James Litinsky, Founder, Chairman, and CEO of MP Materials. “Despite continued weak market pricing, increased NdPr sales volumes drove a return to year-over-year revenue growth. We are also pleased with our progress on scaling midstream production and reducing costs, providing line of sight to positive refining gross margins early next year.”
Ian Cooper is an experienced trader who uses a combination of technical, fundamental, and news analysis to help individual investors grow their wealth. Ian’s Premium Options Strategies