The value of two rare earth elements required for powerful magnets surged to their highest level in more than two years, following MP Materials Corp’s decision to halt shipments to a large magnet maker in China.
The company’s move comes as demand for the rare earth elements continues to rise.
In July, MP Materials announced a deal with the US government to refine its rare earth production domestically. The agreement requires the company to stop shipping its materials to China.
In return, the US government offered to pay MP $110 per kilogram (kg) for NdPr, a mixture of neodymium and praseodymium.
The Chinese price of NdPr oxide has climbed to 632,000 yuan per metric ton, or $88 per kg, from $63 on July 9, Reuters reported.
The media outlet noted that China controls about 90% of refining capacity for rare earths and around 70% of materials mined.
Reuters added that MP's shipments comprised 7% to 9% of China's oxide production from NdPr mining in the past three years, citing research from consultancy firm Adamas.
NdPr is used in magnets that power electric vehicles, wind turbines, and some defense technology.
MP Materials shares were down about 1% in late-morning trading on Tuesday but have soared more than 337% year to date to their current price of $71.65.