Rare Earth ETF’s Record Output From Top Holdings Fails to Halt 26% Monthly Slide
Published on 07/30/2026 at 19:01 | Redaktion boerse-global.de
The VanEck Rare Earth/Strategic Metals ETF notched a 2.47% gain on Thursday, climbing to €11.39, but the bounce does little to mask the severity of the recent sell-off. The fund has shed roughly a quarter of its value over the past 30 days alone, even as several of its largest holdings reported blockbuster production figures.
That disconnect between operational strength and market sentiment is becoming the defining feature of this sector. Mineral Resources posted record lithium volumes across all business lines in its fiscal year through June 2026, while Pilbara Minerals beat its own production guidance. Yet the ETF continues to trade deep in oversold territory.
Iluka Secures First Rare Earth Offtake Deal
Late on July 28, Iluka Resources released its quarterly update with a significant milestone: the company signed its first binding offtake agreement for rare earth oxides with a major global automaker. The take-or-pay contract, which kicks off in 2028, covers 1,200 tonnes of magnet rare earth oxides annually, providing a guaranteed revenue stream for years to come.
Progress on Iluka’s rare earth refinery in Eneabba is also advancing. The facility is roughly 60% complete, with key equipment already on site. Meanwhile, contracted zircon sand prices for the third quarter of 2026 rose by $215 per tonne to approximately $1,761, a dynamic that should support margins in the second half despite a net loss of roughly A$25 million in the first half.
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Lithium Heavyweights Deliver Record Quarters
Mineral Resources reported on July 29 that every division — mining services, iron ore, and lithium — achieved record volumes in the June quarter. Lithium spodumene sales hit 158,000 tonnes, a company record, with average realized prices climbing 15% quarter-on-quarter to $2,425 per tonne. The stock responded with a 4.19% gain on Thursday, as investors also cheered a reduction in net debt to roughly A$4.3 billion, underpinned by solid free cash flow.
Pilbara Minerals followed a day later with its own quarterly update. Revenue jumped 31% to A$743 million for the June quarter, while full-year spodumene production of 879,500 tonnes exceeded the company’s own guidance. Realized prices averaged $2,107 per tonne, up 13% from the prior quarter. Management is guiding for production of between 1.03 million and 1.1 million tonnes in fiscal 2027, with the Ngungaju facility expected to reach full capacity.
MP Materials Faces a Price Target Cut
Not all portfolio heavyweights are firing on all cylinders. JPMorgan Chase lowered its price target on MP Materials to $60 on July 29, just ahead of the company’s quarterly results due August 6. The revision, however, does not diminish the company’s strategic importance. Reports from late July continue to highlight the Pentagon’s influence on the domestic rare earth industry, particularly around building a secure U.S. supply chain for heavy rare earths like dysprosium and terbium — critical inputs for heat-resistant permanent magnets used in defense technology and electric vehicles.
Technical Signals Point to Oversold Territory
The ETF currently sits 39.30% below its 52-week high of €18.76, reached in May 2026. The 14-day relative strength index stood at 27.2 on Thursday, suggesting oversold conditions. That reading is actually an improvement from Wednesday’s close of 22.0, when the fund ended at €11.11 after a 3.21% single-day decline.
Over a 12-month horizon, the fund still shows a gain of 31.59%, though year-to-date performance stands at minus 9.23%. The annualized 30-day volatility of 34.87% underscores how jittery the sector has become, reacting sharply to individual company announcements.
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New Competition and Regulatory Headwinds
The recent weakness coincides with fresh regulatory uncertainty out of China. Since July 1, Beijing has been actively encouraging whistleblowing on rare earth export control violations, adding another layer of complexity to global supply chains.
Meanwhile, competition is heating up on the product side. Deka registered a new rare earth and strategic metals ETF with Germany’s BaFin in late July, a vehicle that will directly compete with the VanEck fund, which currently manages roughly $1.2 billion.
The coming weeks will test whether the sector’s fundamental strength can overcome these headwinds. MP Materials’ August 6 earnings report will be closely watched, given the recent price target cut and the ongoing Pentagon debate around domestic supply chains. For now, the ETF’s oversold technical reading offers a potential entry point — but only if the record output from its top holdings can eventually translate into sustained investor confidence.
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