Shares in major Australian rare earth producers have experienced a sharp sell-off following unconfirmed reports that the Trump administration may retreat from plans to implement government-backed "price floors" for critical minerals.
Lynas Rare Earths (ASX:LYC) saw its stock tumble 11% in early trading, while Iluka Resources (ASX:ILU)—already grappling with soft mineral sands pricing—dropped 15%.
The volatility stems from a reported shift in Washington, where senior officials allegedly informed industry executives that domestic projects must achieve financial viability independently rather than relying on federal price guarantees.
In mid-2025, a landmark US Department of Defense plan to set a price floor of US$110 per kilogram for neodymium and praseodymium triggered a massive rally, nearly doubling the share prices of companies like Lynas.
Investors had bet that such interventions would provide a necessary safety net against China’s market dominance.
However, recent reports suggest the administration may pivot toward more traditional tools—such as tariffs and local-content rules—leaving developers to face the current market price of roughly US$100 per kilogram without a guaranteed floor.
The impact has been felt across the entire sector, from pre-revenue aspirants to established global players.
Arafura Rare Earths (ASX:ARU) and Meteoric Resources (ASX:MEI) saw declines of 6% and 11% respectively, as the market recalibrates the likelihood of state-supported pricing frameworks.