Shares of Asian companies in the rare earth metals sector fell on Thursday after the United States and China agreed to extend their trade truce for two more months, easing near-term uncertainty over supplies of critical minerals between the two largest economies in the world.

Shenghe Resources shares fell by 2.1%, China Rare Earth Nonferrous Metals declined by 1.1%, and China Northern Rare Earth Hi-Tech dropped by 1.1% in Shanghai. Australia’s Lynas Rare Earths fell by 2%, and Iluka Resources by 0.5%.

The decline followed a statement by U.S. Treasury Secretary Scott Bessent that Washington and Beijing agreed to extend the so-called Pusan Agreement until January 10, beyond the previous expiration date of November 10, to allow more time for negotiations on a broader economic agreement.

The deal temporarily eased trade tensions and included measures affecting critical minerals. China had previously agreed to suspend some export restrictions on rare earth metals, while U.S. officials continue to put pressure on Beijing regarding the pace and reliability of supply. Last week, Reuters reported that China still was not meeting part of its rare-earth metals supply obligations.

Extending the agreement could potentially reduce the immediate risk of another escalation in tariffs and export restrictions, which had been a key source of volatility for shares in the rare earth sector. China controls up to 70% of global rare earth mining, about 85% of processing capacity, and around 90% of production of alloys and magnets made from rare earth elements, making this sector particularly sensitive to trade talks between the United States and China.

The extension does not resolve the underlying dispute over supplies. Reuters reported that U.S. officials pointed to a shortfall from China in rare-earth metals shipments, and that shipments of Chinese rare-earth magnets to the United States in August fell by 20% month-on-month, according to Chinese customs data cited by the Financial Times.

The parties are expected to use the additional time to work on a broader economic agreement, while issues including agriculture, supplies of rare earth metals, tariffs, and other trade disputes remain on the negotiation agenda.

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