ASX rare earths shares were up again on Wednesday amid news that tech giant Apple Inc (NASDAQ: AAPL) was ramping up its investment in MP Materials.
The Arafura Rare Earths Ltd (ASX: ARU) share price gained almost 5% yesterday.
And Iluka Resources Ltd (ASX: ILU) was up around 4%.
Lynas Rare Earths Ltd (ASX: LYC) gained more than 1% during Wednesday's trade but pulled back to end the day up by 0.1%.
Image source: Getty Images
Supply and demand
As rare earths supply concerns mount amid trade disputes between China and the USA, consumers are scrambling to secure stock.
Apple announced yesterday it had committed US$500 million to invest with MP Materials, the USA's only fully integrated rare earth producer.
The funds will be used to build a factory in Texas to manufacture rare earths products designed for Apple devices.
Tim Cook, Apple's CEO, said Apple also plans to build a rare earths recycling factory in California.
Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the United States.
China, the world's biggest producer of rare earths, has dominated the rare earths market for decades.
It has long identified the strategic significance of rare earths and has used its dominant position as political leverage.
Trading tariffs
Souring relations between the United States and China resulted in the Middle Kingdom blocking rare earths exports to the US.
Companies and governments have since been pushing to ensure minimal disruptions of the critical minerals supply chain.
Last week it was announced that MP Materials had secured backing from the Pentagon.
ASX-listed rare earths shares surged following that news, adding to solid gains already notched up this year.
The Lynas share price is up more than 50% since the start of 2025.
And Arafura shareholders have seen gains exceeding 80% over the same time frame.
While Iluka shares haver mounted a solid recovery over the last few months, its share price is still a long way from the highs it was hitting a few years ago.
Back in 2022, Iluka shares were changing hands for up to $12.16.
Today, Iluka shares are trading at around $5.03 each.
Similarly, with Lynas shares trading at around $9.88, they are a long way from the highs they reached in 2011, when they were going for $23 apiece.
And the Arafura share price also remains far below its high of $1.79 achieved in 2007.
Arafura shares are currently changing hands for $0.21 each.
Foolish Takeaway
ASX rare earths shares have notched up solid gains over the past couple of months.
But while some investors have enjoyed quick profits, longer-term shareholders are barely beginning to recoup hefty losses.
Clearly, the share prices of rare earths companies have benefitted from the news cycle and resulting hype.
As such, rare earths shares remain vulnerable to rapid swings amid political uncertainty.
