Rare Earth ETF Stuck Near Floor as Beijing Tightens Grip and Lynas Moves on Meteoric
Published on 10/20/2026 at 06:51 | Editorial boerse-global.de
Two deals on opposite sides of the planet are quietly redrawing the map of the rare earths industry — and neither has done anything yet for the VanEck Rare Earth ETF, which closed Monday at EUR 9.40, down 1.4% and barely above its 52-week low of EUR 9.30 set on 19 October.
In China, Shenghe Resources said Monday it will offload 51% majority stakes in four processing subsidiaries to China Rare Earth Group Industrial Development, a unit of state-owned China Rare Earth Group. The consideration is put at roughly RMB 1.66 billion to 1.81 billion. It is not a transaction the fund is party to, but it tilts the processing layer of the Chinese supply chain — the segment that does most to set prices for rare earth oxides and metals — further into state hands.
Down under, Lynas Rare Earths has agreed to acquire Meteoric Resources in an all-stock deal valued at about AUD 968 million. The transaction hands Lynas Meteoric's Caldeira project in Brazil and is scheduled to close in March 2027, subject to approval by Meteoric shareholders. For a fund that tracks the sector broadly, the logic is straightforward: major producers locking up resources outside China to reduce dependence on Beijing.
Beijing Keeps Its Hand on the Tap
China, meanwhile, has reiterated its willingness to keep easing export licensing for European buyers of rare earths. The government said it would continue approving applications through the existing export-control dialogue mechanism, but asked for relief in return on Chinese licence requests for dual-use goods in the EU. That falls well short of a blanket guarantee of unrestricted supply. In comments to CNBC, Beijing added that it would keep processing licences for European buyers regardless of whether the US-China trade agreement is extended beyond January.
Should investors sell immediately? Or is it worth buying VanEck Seltene Erden ETF?
The net effect on the market is limited. China remains the dominant force in rare earth supply and pricing, and concessions are granted selectively and with strings attached — leaving Western buyers with persistent uncertainty over actual availability.
Diplomacy Without Detail
The Shenghe sale lands in a stretch when industry observers such as Rare Earth Exchanges have characterised supply-chain developments between West and East as structurally positive, while cautioning that China still controls the key bottlenecks. The deal is a concrete illustration: rather than an opening of the market, processing capacity is concentrating further in state hands.
Roughly two weeks ago the EU and China announced a first trade agreement, which according to EU Trade Commissioner Maroš Šef?ovi? includes measures to stabilise rare earth supply chains. Details have stayed thin, and the practical impact on supply — and on the positions held by the fund — remains unclear.
No Break in the Downtrend
The fund is down 25% year to date. Neither the trade thaw between Brussels and Beijing nor the latest consolidation in Chinese processing has triggered meaningful buying in the stocks the ETF tracks. No fund inflows or outflows have been documented for the recent period, and there have been no index changes or analyst actions to set a clear direction.
Anyone betting on an easing of supply-side pressure has to weigh the deepening state control in China against the political signals coming out of Brussels and Beijing. Near term, macro uncertainty around US-EU-China trade relations is likely to keep driving the fund's price action. Investors will be watching the Meteoric shareholder vote and further signals from Beijing on export practice in the weeks ahead.
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