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【Opportunity Express】Can MP Materials become the 'Ace' in the U.S. Rare Earth Industry Chain?

Recently, a rare earth company's stock has performed exceptionally well, nearly doubling since July!
It is the only rare earth producer in the United States-- $MP Materials (MP.US)$ MP Materials, which has recently become a market focus due to significant investment from the U.S. Department of Defense. Naturally, the Department of Defense values MP's rare earth resources. One such resource is praseodymium-neodymium, a critical raw material in high-tech manufacturing, used in new energy vehicles, consumer electronics, industrial robotics, wind power, and aerospace industry chains.
In other words, rare earth resources are extremely important. Whoever controls the rare earth industry chain can control the cost of goods manufactured and capacity expansion in related industries.
So, $MP Materials (MP.US)$ what kind of company is MP Materials? Can it truly become the 'ace' in the U.S. rare earth industry chain?
The Rare Earth Comeback Story of MP Materials
MP Materials was born in 1952 as a mine called Mountain Pass, which supplied a majority of the global color TV market with its abundant production of dysprosium, claiming the title of the world's rare earth hegemon.
Unfortunately, by the 1980s, CHINA RAREEARTH rapidly rose to prominence with low-cost, high-volume production. By 1986, China had surpassed the U.S. to become the largest producer and supplier of rare earths. Meanwhile, Mountain Pass, which had been prosperous for decades, began to decline and eventually went bankrupt in 2015 due to continuous fines and dwindling investment, turning into an abandoned mine.
A turning point came in 2017 when a hedge fund called JHL Capital acquired Mountain Pass at a low price and established $MP Materials (MP.US)$ In May 2021, the Mountain Pass mine officially resumed operations. However, while MP had access to rare earth resources, it lacked refining technology and could not process raw materials into rare earth magnets.
Recently, a rare earth company's stock has performed exceptionally well, nearly doubling since July! It is the only rare earth producer in the United States-- $MP Materials (MP.US)$ MP Materials, which has recently become a market focus due to significant investment from the U.S. Department of Defense. Naturally, the Department of Defense values MP's rare earth resources. One such resource is praseodymium-neodymium, a critical raw material in high-tech manufacturing, used in new energy vehicles, consumer electronics, industrial robotics, wind power, and aerospace industry chains. In other words, rare earth resources are extremely important. Whoever controls the rare earth industry chain can control the cost of goods manufactured and capacity expansion in related industries. So, $MP Materials (MP.US)$ what kind of company is MP Materials? Can it truly become the 'ace' in the U.S. rare earth industry chain? The Rare Earth Comeback Story of MP Materials MP Materials was born in 1952 as a mine called Mountain Pass, which supplied a majority of the global color TV market with its abundant production of dysprosium, claiming the title of the world's rare earth hegemon. Unfortunately, by the 1980s, CHINA RAREEARTH rapidly rose to prominence with low-cost, high-volume production. In 1986, its output surpassed that of the United States, making it the largest producer and supplier of rare earths. Meanwhile, Mountain Pass, which had been thriving for decades, began to decline, ultimately due to continuous fines and a lack of investment...
Therefore, MP made a bold decision to partner with Shenghe Resources Holding, the largest rare earth company in China, exclusively selling its ore to Shenghe. In return, Shenghe invested and acquired a stake in MP, and to this day, Shenghe remains the fourth-largest Shareholder of MP, holding 7.75% of the shares.
Recently, a rare earth company's stock has performed exceptionally well, nearly doubling since July! It is the only rare earth producer in the United States-- $MP Materials (MP.US)$ MP Materials, which has recently become a market focus due to significant investment from the U.S. Department of Defense. Naturally, the Department of Defense values MP's rare earth resources. One such resource is praseodymium-neodymium, a critical raw material in high-tech manufacturing, used in new energy vehicles, consumer electronics, industrial robotics, wind power, and aerospace industry chains. In other words, rare earth resources are extremely important. Whoever controls the rare earth industry chain can control the cost of goods manufactured and capacity expansion in related industries. So, $MP Materials (MP.US)$ what kind of company is MP Materials? Can it truly become the 'ace' in the U.S. rare earth industry chain? The Rare Earth Comeback Story of MP Materials MP Materials was born in 1952 as a mine called Mountain Pass, which supplied a majority of the global color TV market with its abundant production of dysprosium, claiming the title of the world's rare earth hegemon. Unfortunately, by the 1980s, CHINA RAREEARTH rapidly rose to prominence with low-cost, high-volume production. In 1986, its output surpassed that of the United States, making it the largest producer and supplier of rare earths. Meanwhile, Mountain Pass, which had been thriving for decades, began to decline, ultimately due to continuous fines and a lack of investment...
Thus, Shenghe became MP's lifeline, allowing it to survive.
The ambitions of MP Materials
$MP Materials (MP.US)$ While it may seem that MP is dependent on its competitor, it actually harbors even greater ambitions.
MP Materials is no longer content with just mining and is transforming into a company that covers the entire rare earth industry chain, including upstream Mountain Pass rare earth mining, midstream rare earth oxide material production, and downstream rare earth magnet processing.
Currently, MP Materials is shifting towards higher-value-added midstream and downstream products, including the production of rare earth concentrates refined into rare earth oxides (REO) and neodymium-praseodymium oxides (NdPr). Overall, MP Materials has achieved an REO output of 45,400 tons and NdPr output of 1,294 tons in 2024. Quarterly data shows that REO production has entered a stable phase, while NdPr output has increased significantly, reaching 560 tons in Q1 2025, representing a 330% year-over-year growth.
Recently, a rare earth company's stock has performed exceptionally well, nearly doubling since July! It is the only rare earth producer in the United States-- $MP Materials (MP.US)$ MP Materials, which has recently become a market focus due to significant investment from the U.S. Department of Defense. Naturally, the Department of Defense values MP's rare earth resources. One such resource is praseodymium-neodymium, a critical raw material in high-tech manufacturing, used in new energy vehicles, consumer electronics, industrial robotics, wind power, and aerospace industry chains. In other words, rare earth resources are extremely important. Whoever controls the rare earth industry chain can control the cost of goods manufactured and capacity expansion in related industries. So, $MP Materials (MP.US)$ what kind of company is MP Materials? Can it truly become the 'ace' in the U.S. rare earth industry chain? The Rare Earth Comeback Story of MP Materials MP Materials was born in 1952 as a mine called Mountain Pass, which supplied a majority of the global color TV market with its abundant production of dysprosium, claiming the title of the world's rare earth hegemon. Unfortunately, by the 1980s, CHINA RAREEARTH rapidly rose to prominence with low-cost, high-volume production. In 1986, its output surpassed that of the United States, making it the largest producer and supplier of rare earths. Meanwhile, Mountain Pass, which had been thriving for decades, began to decline, ultimately due to continuous fines and a lack of investment...
In the magnetic materials business, MP Materials aims to achieve commercial production of neodymium-iron-boron magnets by the end of 2025. Its Independence Facility in Fort Worth, Texas, has begun trial production of automotive-grade magnets and has received a $50 million prepayment from General Motors. The company expects its magnetic materials business to turn EBITDA positive in 2025 and become a new growth engine.
What does the Department of Defense's investment mean?
The U.S. Department of Defense's $MP Materials (MP.US)$ investment signifies the U.S. government's emphasis on the self-sufficiency of the rare earth industry.
This time, the Department of Defense invested $400 million in MP Materials in the form of preferred shares, expected to hold a 15% stake, becoming the largest shareholder. The Department of Defense will fund MP Materials to expand rare earth processing and build a new magnet manufacturing plant in the U.S., scheduled to start production in 2028 with an annual capacity of 10,000 tons. Additionally, the Department of Defense has committed to purchasing 100% of the magnets produced by the new factory over ten years and set a floor price of $110 per kilogram for neodymium-praseodymium oxides, nearly double the current market level in China.
This also reflects the urgency of the U.S. government to accelerate the localization of the U.S. rare earth industry chain. In the current global rare earth industry landscape, China holds a dominant position, controlling approximately 70% of global rare earth production and 90% of refining capacity, as well as 65% of global rare earth patents.
Although MP Materials has the largest rare earth mine, 80% of its raw materials are exported to China for further processing, with approximately 70% of its revenue coming from the sale of rare earth concentrates to Shenghe Resources Holding (data source: 2024 Earnings Reports). This year, due to China's export restrictions and the U.S.-China trade war, MP Materials had to stop selling rare earth concentrates to Shenghe, which will inevitably affect its short-term revenue.
Therefore, for MP Materials, reducing its dependence on China is an urgent matter. It needs to quickly expand its potential customer base outside of China and, more importantly, accelerate its downstream business, including enhancing its rare earth separation and magnet manufacturing capabilities, and integrating the entire Industry Chain.
For the United States, this is not just about MP Materials' survival but also a hidden bargaining chip in the geopolitical competition!
Stock Price Trend Analysis
After signing an agreement with the Department of Defense on July 10, $MP Materials (MP.US)$ the stock price surged by 50%, rising for several consecutive days to reach a historical high of $65.84.
Recently, a rare earth company's stock has performed exceptionally well, nearly doubling since July! It is the only rare earth producer in the United States-- $MP Materials (MP.US)$ MP Materials, which has recently become a market focus due to significant investment from the U.S. Department of Defense. Naturally, the Department of Defense values MP's rare earth resources. One such resource is praseodymium-neodymium, a critical raw material in high-tech manufacturing, used in new energy vehicles, consumer electronics, industrial robotics, wind power, and aerospace industry chains. In other words, rare earth resources are extremely important. Whoever controls the rare earth industry chain can control the cost of goods manufactured and capacity expansion in related industries. So, $MP Materials (MP.US)$ what kind of company is MP Materials? Can it truly become the 'ace' in the U.S. rare earth industry chain? The Rare Earth Comeback Story of MP Materials MP Materials was born in 1952 as a mine called Mountain Pass, which supplied a majority of the global color TV market with its abundant production of dysprosium, claiming the title of the world's rare earth hegemon. Unfortunately, by the 1980s, CHINA RAREEARTH rapidly rose to prominence with low-cost, high-volume production. In 1986, its output surpassed that of the United States, making it the largest producer and supplier of rare earths. Meanwhile, Mountain Pass, which had been thriving for decades, began to decline, ultimately due to continuous fines and a lack of investment...
As bullish news gradually materializes, the upward momentum of MP Materials' stock price may weaken. In the short term, we can refer to the 23.6% Fibonacci retracement level as the first Resistance, with a reference price of around $54.7. The Target Price will depend on subsequent Business performance, with a focus on the progress of downstream operations, including neodymium and praseodymium production capacity. The company is expected to release its Q2 2025 earnings on August 7, and we should pay close attention to the relevant data.
In summary
In summary, $MP Materials (MP.US)$ as the most representative rare earth company in the United States, MP Materials has evolved from a pure mining operation into a full industry chain company. The rapid increase in neodymium and praseodymium production is releasing bullish signals.
As the demand for neodymium-iron-boron magnets surges in sectors such as electric vehicles, wind power, and industrial motors, MP's strategic position will become even more critical. With strong national support and recent orders from Apple, it is clear that MP is highly anticipated and is receiving robust backing in the development of the rare earth industry.
For investors, MP is an emerging star that is slowly rising. Its business evolution has the potential to influence the global rare earth industry landscape, making it worth long-term tracking.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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