The Rare-Earth Truce Bought Two Months on Paper and 11 Days in Law — and Only Nov. 10 Is Tradable

Beijing's instrument is MOFCOM Announcement No. 70 of 2025, issued Nov. 7, 2025, which suspended six export-control announcements through Nov. 10, 2026. Washington's instrument is a suspension of the Affiliates Rule published in the Federal Register on Nov. 12, 2025, which ends Nov. 9, 2026 and reinstates the rule in the Export Administration Regulations on Nov. 10. A two-month extension of the U.S. suspension was announced, but as of Oct. 22 the formal notice was still pending, and Beijing has published nothing at all. Nov. 10 also lands one week after the U.S. midterms, which is the least likely window for a last-minute American notice that tightens export controls — the calendar now runs on two documents that neither side has signed.

That distinction matters more than the headline. Announcement No. 70 suspends controls on heavy rare earths and on foreign-made magnets; it does not touch the licensing already in force on dysprosium and terbium, which is what has actually squeezed the ex-China magnet chain. That is why dysprosium oxide was assessed at $2,500–3,500/kg outside China in October against a $179.48/kg APAC benchmark — a 14–19x spread that has nothing to do with Nov. 10. China controls an estimated 85–90% of global dysprosium production, and the April 2025 licensing regime on seven medium and heavy rare earths has never been lifted, only paused over a wider front.

China shipped 43,711 tonnes of rare earths in the first nine months of 2026, down 9.6% year over year, then exported 4,269.8 tonnes in September, up 6.7%. The mix tells the story: in January and February 2026 magnet shipments to the European Union rose 28.4% to 4,775 tonnes, which was 44.4% of all magnet exports, while shipments to the United States fell 22.5% to 994 tonnes. Europe is being served; the United States is being priced out.

The mechanism is licensing, not embargo. Since December 2025 China has issued year-long general licences to large Chinese magnet makers, including JL MAG, Ningbo Yunsheng and Beijing Zhong Ke San Huan, covering exports to individual customers. Because those licences run for one year, the December 2025 cohort lapses on its own schedule in December 2026 unless renewed. A Nov. 10 lapse restores the licence requirement for five heavy rare earths and for foreign-made magnets containing Chinese content, which slows Western buyers' access to Chinese material without closing it. Light rare earths have not broken: the neodymium benchmark stood at 927,500 CNY a tonne on Oct. 30, 36.4% above a year earlier.

MP Materials is the one listed company whose contract with this deadline is written down. The Defense Department price-protection agreement began Oct. 1, 2025 and runs to Dec. 31, 2035, paying the difference between the quarterly benchmark average volume-weighted price and $110 per kilogram for NdPr concentrate, oxide and metal. In Q2 2026 that payment was $17.58 million, booked outside revenue.

Strip out the government put and the picture changes. Gross profit of $36.2 million less $17.6 million of price-protection income leaves $18.6 million on $108.5 million of revenue, a 17% gross margin rather than 33%. More than half of MP's quarterly gross profit is a government contract, not a market price. The agreement is symmetric in the other direction too: once the 10X facility reaches full production, MP must pay the Defense Department 30% of the amount by which the benchmark exceeds $110 per kilogram. The floor is secure; the convexity is not, which is precisely why a headline truce extension matters less to this stock than the paperwork does.

On July 1, 2026, General Motors terminated its long-term magnet supply agreement with e-VAC Magnetics, triggering arbitration over unused capacity compensation at VAC's 500M Sumter, South Carolina plant. Energy Fuels amended its $1.9 billion VAC acquisition to allow purchase-price adjustments tied to the loss of GM as Sumter's anchor customer, and rare earth equities fell hard: Energy Fuels dropped 46% and Lynas 41% from July 1. The cause was demand, not magnet quality. U.S. EV sales fell 30.7% through September 2026 and GM's EV sales fell 43%.

The Pentagon's January 2027 sourcing restriction is the one demand curve in this chain that does not depend on EV incentives. From January 2027 the Defense Department will not procure samarium-cobalt or NdFeB magnets containing material mined, refined, separated, melted or produced in China. U.S. buyers have already started paying up: outside-China terbium oxide jumped 41% in a single week in October to $5,000–8,000 per kilogram, from $4,200–5,000 per kilogram on Sept. 24, and market participants report U.S. consumers paying significantly more than European buyers for the same non-Chinese material.

What would break this thesis is specific. A MOFCOM notice published before Nov. 9 would remove the event and leave the ex-China heavy-rare-earth spread as the only tradable variable. A recovery in U.S. EV volumes would revive the utilization math that broke on July 1. And the threat to MP's floor is not Beijing at all: the counterparty is the Defense Department, which is also the buyer that will price the 10X expansion and starts taking 30% of everything above $110 per kilogram once that plant is full.