Xi Jinping US visit: Rare-earth magnets could be in focus
What's the story
Chinese President Xi Jinping is set to embark on a three-day official visit to the US, his first in over a decade. The White House has announced the schedule for this high-profile meeting, leaving global market observers speculating about its potential impact on various sectors. Notably, experts have observed a decline in Chinese exports of rare-earth magnets ahead of this visit.
Strategic partnership
Shift in global supply chains
The decline in Chinese exports of rare-earth magnets could have a major impact on global supply chains.
As the US looks for alternatives to China's grip on critical minerals, India is emerging as a key strategic partner.
However, since IREL (India) Limited, India's primary rare earth extractor, is unlisted, market excitement spills over into listed proxy sectors.
Market response
Mining giants and industrial mineral players
Seema Srivastava, Senior Research Analyst at SMC Global Securities, has identified several companies that could respond to global critical mineral supply concerns.
These include diversified mining and metal giants such as Vedanta, Hindustan Zinc, and National Aluminium Company (NALCO).
Specialized industrial mineral players like Gujarat Mineral Development Corporation (GMDC) and Ashapura Minechem also often see speculative buying during these times.
Indirect impact
Potential impact on EV companies
The upcoming US-China summit could also have an indirect impact on electric vehicle (EV) companies.
Avinash Gorakshkar, Founder of Avinash Mentor Research, has advised investors to keep an eye on EV stocks such as Uno Minda, Ather Energy, and Ola Electric Mobility.
These companies are likely to respond ahead of or during the Xi Jinping-Donald Trump talks.