Lynas Shares Surge Following China's Export Ban

(Reuters) – Shares of Australia's Lynas (F:LYI) Rare Earths climbed to a near three-week high on Wednesday, a day after China banned exports of some critical minerals to the United States.

China on Tuesday banned exports of gallium, germanium, and antimony, which have widespread military applications, to the United States, escalating trade tensions after Washington's latest crackdown on China's chip sector.

This decision has raised concerns that China could target other critical minerals, including those with broader usage such as nickel, cobalt, and rare-earths.

Shares of Lynas, the world's biggest producer of rare earth minerals outside China, ended the session up by 5% at A$7.32, making it one of the top gainers on the benchmark ASX 200, which slipped 0.4%.

Market analysts foresee that the ban signals the near-inevitability of a heightened U.S.-China trade war 2.0, as Beijing continues its tit-for-tat response to Washington's chip restrictions. According to Hebe Chen, a market analyst at IG, "This rising tension could potentially position Australia, a key player in the global critical minerals market, to capitalize on increased demand and diversify its export partnerships."

The order also requires stricter review of the end-usage of graphite items exported to the U.S. Shares of graphite companies in Australia such as Syrah Resources and Renascor Resources closed 13.6% and 3.3%, respectively.