China is amping up the trade war with the U.S. by announcing a new list of metals export restrictions. This has the country targeting metals that are used across a wide variety of fields. That includes those needed for electric vehicles (EV), the defense sector, and more.
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The metals in the China export restriction are tungsten, indium, bismuth, tellurium, and molybdenum. While these metals aren’t banned from being exported to the U.S., China now requires licenses for U.S. companies to purchase these materials and restricts some versions of them.
According to China, these metals were chosen to “safeguard national security interests.” This is similar to the reasons behind the U.S. limiting the types of semiconductors that can be purchased by Chinese companies.
What This Means for Metal Prices
It’s possible that metal prices will increase alongside China’s new tariffs and export restrictions. However, one analyst notes that prices may remain unaffected as there are plenty of alternative sources outside China to obtain these metals.
This could be good news for U.S. metal companies as manufacturers turn to them to acquire the metals they need. That could, in turn, increase revenue and profits for them. It may be an unintended effect on China’s part, but the export restrictions could benefit the U.S. economy as it seeks metal sources close to home.
Metal Stock Comparisons
With that in mind, investors might consider a stake in U.S. metal and mining stocks that could benefit from China’s metal export restrictions. Some of the top metal stocks worth considering are United States Steel (X), Nucor (NUE), Steel Dynamics (STLD), Commercial Metals Company (CMC), and Reliance Steel (RS). Each of these stocks holds a consensus Moderate Buy rating, with CMC offering the most upside potential at 27.29%.
