EGRNF - Why Rare Earth and Lithium Stocks Crashed Today
Monday put investors in lithium and rare earth metal stocks on the edge. While Standard Lithium (NYSEMKT: SLI) and Lithium Americas (NYSE: LAC) sank 10.7% and 13.3%, respectively, by 2:30 p.m. EDT, rare earth stock MP Materials (NYSE: MP) was down 8.5% by then.
With concerning news from China and an electric-vehicle (EV) manufacturer slashing its outlook on supply shortages hitting electric-vehicle stocks hard, lithium and rare earth stocks were bound to feel the heat.
Chinese stocks fell off the cliff Monday as property developer China Evergrande Group (OTC: EGRNF) was reported to be on the brink of bankruptcy. This news sent panic waves across the investing community. The situation is reminiscent of the Lehman Brothers financial crisis of 2008: Evergrande is among the leading lenders in China with billions in debt likely to be defaulted. That not only poses a serious threat to all the banks with exposure to the company but could also have ripple effects across China's property and financial markets. If Evergrande were to collapse, this would likely slow down growth in the nation or perhaps even drive it into a recession.
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Why Rare Earth and Lithium Stocks Crashed Today