Key insights
- The post discusses investment opportunities in US-domestic critical minerals, driven by reshoring initiatives and government policy (IRA, CHIPS Act). The author highlights MP Materials, Materion, Nucor, and Linde as potential plays, noting the valuation challenges for pure-plays like MP Materials and Materion, whose value lies in option value on supply chain buildout. The author seeks advice on entry timing, position sizing, and whether to include international names, indicating a potential medium-term bullish outlook on the sector
Hi all, first time posting here. Looking for thoughts on a sector I've been watching but haven't pulled the trigger on.
The interest: US-domestic critical minerals and materials. China controls 60-90% of global supply across rare earths, gallium, germanium, magnesium. US policy response (CHIPS Act, IRA, Defense Production Act) will cause more funding flowing into reshoring. EV magnets, semiconductor manufacturing, defense procurement all depend on it.
Multi-year reshoring story. Real. But equity expression is where I'm stuck.
Stocks on my radar:
- MP Materials (MP). Only fully integrated rare earth processor in the Western Hemisphere, GM offtake on magnets. * Materion (MTRN). Specialty beryllium alloys for defense and aerospace, real customer lock-in. * Nucor (NUE). Largest US steel producer, EAF cost advantage, decades of through-cycle compounding. * Linde (LIN). Wide-moat industrial gases, helium and specialty electronics gases as the relevant slice.
What I'm uncertain about: MP and MTRN look expensive on traditional value metrics. The thesis is option value on Western supply chain buildout, not current earnings. NUE and LIN are higher quality but critical minerals is a tailwind, not the core thesis for either.
What I'd love your read on:
- When to enter. Do you wait for a cycle pullback in MP and MTRN, or accept that policy-driven names don't trade like cyclicals? What signals would you actually watch? * How to approach. Concentrated position in the cleanest pure-play (MP), or spread across the four with bigger weights on quality (LIN, NUE)? * What I'm missing. International quality names (Lynas, Iluka) capture supply chain diversification too. Worth substituting one in?
First time here, let me if I'm thinking about this wrong. I will be late to this, but it took me some time to wrap my head around this