Agree Stoof. Total market over reaction this morning. Rare earth...

Agree Stoof. Total market over reaction this morning. Rare earth supply problems definitely aren't going to magically disappear anytime soon.

Check out this story today on CNN !

Rare earths shortage could cause pandemic-era disruptions, experts say
CNN. Tue June 10, 2025

Call it a “chip shortage on steroids.”

That’s how one expert told CNN the auto industry is describing a possible shortage of rare-earth elements — minerals that are now center stage in the global trade war. Running low on those minerals could recall the pandemic-era chip shortage that jacked up car prices, used and new, across America.

China has a virtual monopoly on those 17 metallic elements, which are critical components to everyday products from cars to jet engines to electronics like smartphones and flat-screen TVs. They’re even crucial for the contrast dye used in MRI machines and some cancer drugs.

And, recently, China made it even harder to get them: The country introduced a new licensing requirement on the export of the elements in April, effectively slowing the flow of outbound shipments to most of the world, including the United States.

Delegations from the US and China are meeting in London this week to talk about a new trade deal, and rare earths are almost certainly a major part of those discussions. The second day of trade talks has begun Tuesday, a US Treasury spokesperson told CNN. The officials are meeting at the ornate Lancaster House near Buckingham Palace.

Right now, US companies have only about two or three months’ worth of supply, according to Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. After that, “industry simply could not manufacture” unless an agreement is reached between the US and China, she told CNN.

President Donald Trump told reporters Friday that Chinese President Xi Jinping had agreed to allow exports of rare earth minerals products to begin.

But even that promise might not be enough for US manufacturers if a new deal only lifts the restrictions temporarily, said Baskaran.

“It makes it extremely difficult for industry to get a reliable read on what the next three months, six months or a year are going to look like,” she said.

Nor might exports flow fast enough compared to past levels.

“Keep in mind that prior to the (Trump-Xi) call, they were beginning to flow out, but not at the pace that allows supply chains to continue without interruptions,” she added.

US companies might soon burn through stockpiled inventory, according to Baskaran.

One auto industry expert, who asked not to be identified because they aren’t authorized to speak publicly, told CNN it is becoming apparent that the auto industry is prepping for widespread shutdowns in the coming months due to rare earth shortages.

It’s something the expert has heard described by people in the industry as “the chip shortage on steroids.”

Four years ago, a shortage of computer chips caused halts in auto production, which fueled record car prices. The limited supply drove most people to pay above sticker price for new cars.

“People think that it’s only EVs (electric vehicles), but it’s not,” the expert told CNN. “It’s in everything in every car. It’s in the motors that run windshield wipers. One supplier I’m talking to said there are sensors in seat belts. I think there’s going to be production disruptions all over the place. China really has our balls in a vise.”