Ge Long Hui·2025-10-13 08:14Core Viewpoint - The A-share market experienced a collective decline in major indices in the morning, but narrowed losses by the end of the trading session, with the Shanghai Composite Index down 0.19% and the Shenzhen Component Index down 0.93%. The rare earth sector surged due to new export controls announced by the Ministry of Commerce, leading to significant gains in related stocks [1][2]. Rare Earth Sector - The Ministry of Commerce and the General Administration of Customs announced export controls on certain rare earth-related items, which is set to take effect on November 8, 2025. This includes controls on equipment and raw materials used in rare earth production [4]. - Major rare earth companies, Northern Rare Earth and Baotou Steel Rare Earth, announced price increases for rare earth concentrates, with a new price of 26,205 yuan per ton (excluding tax), reflecting a 37% increase compared to the previous quarter, marking the highest price since Q2 2023 [4]. - Northern Rare Earth expects a net profit of 1.51 billion to 1.57 billion yuan for the first three quarters of 2025, an increase of 272.54% to 287.34% year-on-year [4]. Market Performance - The rare earth ETF, managed by E Fund, rose over 7%, with a year-to-date increase exceeding 90%. The ETF closely tracks the rare earth industry index, including major stocks like Northern Rare Earth and China Rare Earth [3]. - The overall market turnover was 2.37 trillion yuan, a decrease of 159.9 billion yuan from the previous trading day, with over 3,600 stocks declining [1]. Strategic Value and Outlook - Analysts from Shenwan Hongyuan Securities highlighted that the new export controls on rare earths enhance the strategic value of the sector amid the US-China competition, suggesting that the sector's valuation has room for growth [5]. - Everbright Securities noted that the strategic importance of rare earths is becoming more pronounced, with recent US actions indicating a focus on building its rare earth supply chain, reflecting the geopolitical significance of these resources [6]. Emerging Opportunities - The demand for rare earths is expected to grow due to new applications in humanoid robots and low-altitude flying vehicles, which utilize neodymium-iron-boron magnets. This presents new growth opportunities for the rare earth sector [7].