The VanEck Rare Earth ETF has hit a rough patch. After more than doubling over the past twelve months—and climbing 26.03% since the start of the year—the fund gave back 9.51% last week alone, closing at €16.17 on Friday. A single-day drop of 3.76% underscored the nervousness gripping a market that had become accustomed to breakneck gains.
What happens next depends largely on two June events: Beijing’s semi-annual mining quotas and a long-awaited shipment of rare earth ore from Greenland.
China’s Ministry of Industry and Information Technology is expected to release the second-half production caps for the domestic rare earth mining sector within weeks. These quotas effectively set the ceiling for global supply, given that China controls roughly 92% of the refined neodymium-praseodymium (NdPr) oxide market. The market is already bracing for a potential squeeze: the price of NdPr fell 21% in April to around $100 per kilogram, retracing much of the first quarter’s doubling but still sitting 88% above the level at the start of the year.
Analysts see a plausible trading range of $95 to $115 per kilogram through the end of June. A lower-than-expected Chinese quota would immediately tighten the supply side and likely push the price back toward the upper end of that band.
Meanwhile, a separate project halfway around the globe is gaining traction. Critical Metals has received the green light to acquire 70% of the Tanbreez rare earth project in Greenland. In June, a 150-tonne bulk sample is set to be shipped to potential buyers in the European Union, the United States, and Saudi Arabia. Tanbreez is particularly valuable for its heavy rare earths—dysprosium and terbium, essential for high-temperature permanent magnets used in electric motors and defense systems. The site’s proximity to deep-water fjords offers year-round access to the North Atlantic, a logistical edge that many competitors lack.
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The race to build non-Chinese supply chains is accelerating. Last year, projects outside China worth a combined $6.3 billion were announced, with the U.S. government accounting for more than 60% of that total. In the first quarter of 2026, another $2.8 billion followed. BMO Global Commodities Research puts the cumulative U.S. investment at roughly $18.6 billion spread across 60 project financings—a striking sum given that the entire global trade in rare earths was only about $3.5 billion recently.
Within the €1.37 billion ETF, the heavyweights are MP Materials and Lynas Rare Earths. MP Materials reported earnings of $0.03 per share for the opening quarter, with NdPr production surging 63% year-on-year. Lynas generated A$265 million in revenue in the March quarter and already holds a supply contract with the Pentagon.
For all the Western investment, China’s dominance remains overwhelming. The country controls 98% to 99% of refined dysprosium and terbium. Bloomberg Intelligence estimates that even if China’s NdPr market share slips from roughly 90% to 69%, a global shortfall of as much as 36% could still materialize under certain scenarios. The International Energy Agency puts the capital needed to build diversified supply chains over the next decade at around $60 billion—a huge sum, but no quick fix for a bottleneck years in the making.
China has suspended its rare earth export controls until November 2026, a pause that market observers interpret as a strategic recalibration rather than a genuine easing. Until then, the clock is ticking. The coming weeks—with the quota decision, the Greenland sample, and the steady drumbeat of new Pentagon contracts—will be decisive for the fund’s next leg. For now, the ETF sits just above its 50-day moving average, a technical level that often decides whether a correction deepens or gives way to a fresh rally.
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