US Price Floor Initiative Sparks Sell-Off in Rare Earth Stocks

MP Materials US5533681012

Shares of MP Materials came under significant selling pressure on Tuesday, plummeting approximately 10 percent. The catalyst was a new international trade strategy unveiled by the US government, which sent shockwaves through the rare earth minerals sector.

The office of the US Trade Representative announced plans to coordinate minimum pricing for critical minerals through partnerships with Mexico, the European Union, and Japan. Trade official Jamieson Greer stated that the potential partnership with Mexico aims to "address global market distortions that have left North American critical mineral supply chains vulnerable to disruption." An action plan with Mexico is slated for implementation within the next 60 days.

A separate declaration of intent on securing critical mineral supply chains is planned to be finalized with the EU within 30 days. The proposed cooperation with Mexico includes coordinated stockpiling, shared regulations for mining and processing, and alignment on investments and geological mapping.

Sector Already Underpinned by Pentagon Agreement

This new policy framework builds upon existing government involvement in the industry. Notably, the Pentagon secured a deal with MP Materials in July 2025. That agreement encompasses a purchase commitment, a price floor guarantee, and a capital investment from the government.

Reducing dependence on China has been a cornerstone of the current administration's trade and industrial policy regarding critical minerals. China dominates the global rare earth supply chain and attempted to restrict exports during trade tensions with the US in 2025. On February 3, the US government further launched a national initiative to stockpile critical minerals. In addition to MP Materials, Washington holds interests in USA Rare Earth, Lithium Americas, and Trilogy Metals.

Investors Await Q4 Earnings for Guidance

Market participants are now looking ahead to the company's upcoming financial results for clarity. MP Materials is scheduled to release its fourth-quarter 2025 earnings on February 26. Management will host a conference call at 23:00 Central European Time. Investors are likely to seek management's perspective on how these recent political developments may impact future business forecasts.