Rare Earth Stocks and Metal Prices Have Rarely Been This Far Apart
Published on 10/29/2026 at 13:12 | Editorial boerse-global.de
The VanEck Rare Earth ETF (ISIN IE0002PG6CA6) closed Wednesday at EUR 9.60, up 0.9% on the day and 5.3% over the week — a modest bounce that still leaves the fund 23% lower year-to-date and a striking 49% below its May peak of EUR 18.76. The gap between that bruised share price and the buoyant physical market is precisely what Canaccord Genuity's critical minerals team has labelled a "great divergence" in rare earths.
The rally that lifted the fund this week had no single identifiable trigger, according to media coverage. The US-listed REMX sector index, which tracks names held in the VanEck portfolio, climbed roughly 4% on Tuesday morning after weeks of steep declines. Spot rare earth prices, meanwhile, have stayed elevated throughout — a disconnect that helps explain why strength in the physical market has yet to translate into a durable recovery for producer equities.
A Fund Under Pressure, but Not Abandoned
Despite the slide, the vehicle remains substantial. As of October 28, the ETF reported net assets of USD 927.07 million across 86.9 million shares outstanding, according to VanEck UCITS ETFs Plc's latest regulatory disclosure. The accumulating share class pays no distribution, reinvesting income within the fund. A 25% decline since the start of the year has not triggered an exodus — the share count suggests capital is staying put.
The technical picture reinforces the strain. The fund's relative strength index sits at 30.4, firmly in oversold territory, after a 16% loss over 30 days. At EUR 9.37 it traded just 5.2% above its 52-week low of EUR 8.91, set on October 23.
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China's Magnet Exports Rebound
Trade data offer a more nuanced read on demand. Chinese exports of rare earth magnets reached 6,165 tonnes in September, up 23% from August and 6.7% year-on-year, according to Radial Magnets citing Chinese customs figures. Reuters likewise reported the 6.7% annual increase, describing a recovery in overseas demand following a summer lull — though the cumulative volume for the year to date remains below the prior year's level.
Prices inside China told a different story. Praseodymium-neodymium oxide slipped from 743,000–745,000 yuan per tonne on October 15 to 732,000–734,000 yuan, data from Shanghai Metals Market showed, attributed to weaker futures and thin buying interest. Terbium oxide also eased, while dysprosium held broadly steady.
Substitution Fears From the Chip Sector
Uncertainty is building on another front. TSMC has asked equipment suppliers about factory automation motors that do without rare-earth-bearing materials, Reuters reported — a substitution effort driven by reliance on Chinese export controls rather than any new restriction. The inquiry is no evidence of an acute shortage, but it signals persistent unease among major buyers of Chinese magnet material. Should chipmakers shift to alternatives permanently, a key end market for rare earth magnets would shrink over time.
Supply-side worries persist as well. Japan's industry ministry said global yttrium exports had stalled, and Tokyo asked Washington to press China to ease its export controls, the Financial Times reported. Certain rare earths therefore remain tight even as overall Chinese magnet shipments picked up.
A Sector Seeking Firmer Ground
Rare earth and critical minerals shares have drawn strong buying of late, led by names such as USA Rare Earth, Critical Metals and TMC. Yet with spot prices and producer equities still far apart, the sector looks prone to volatile swings without a firm foundation. Until those two measures converge, the ETF is likely to struggle to break free of its lows — and investors betting on higher metal prices are getting only partial exposure to that trend through the miners' shares.
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