HEDGE funds are ramping up bets against US critical minerals companies, wagering that Trump administration support won’t be enough to loosen China’s grip on global supply, said the Financial Times citing data from S&P Global Market Intelligence.
Short interest has climbed this year in US Antimony Corporation, American Resources Corporation and MP Materials. Shares in these firms surged last year after Washington pumped billions into the sector via equity stakes, loans and contracts, aiming to build a domestic supply chain independent of China, said the FT.
Investors now worry the rally outpaced the reality of rebuilding supply chains, a process that typically takes years, while China retains the ability to depress prices by flooding markets. Grizzly Research CEO Siegfried Eggert told the newspaper some valuations reflected hype rather than fundamentals.
MP Materials, backed by an early investment from Chamath Palihapitiya, saw shares more than triple last year after Washington took an equity stake and guaranteed minimum prices. US Antimony nearly tripled too, aided by a Pentagon supply contract and Ukraine-linked emergency funding.
American Resources’ affiliate ReElement Technologies secured Defense Department funding, while USA Rare Earth landed $1.6bn in conditional commerce department backing.
Shares on loan in US Antimony have nearly doubled this year to 42% of market capitalisation, S&P data shows, while American Resources’ short interest has more than doubled.
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