[Market Focus] Rare Earth Stocks Surge on US-China Tensions... Samsung Electronics, SK Hynix Weaken

Amid escalating tensions between the United States and China over rare earth export controls, shares of rare earth-related stocks in the domestic market surged by double digits on the morning of October 13. However, Samsung Electronics and SK Hynix saw declines.

As of 10 a.m. on this day, shares of Union Materials were trading at 2,210 won per share, up 29.77% from the previous trading day. Other stocks classified as rare earth theme stocks, such as Sung An Materials and Union, also soared by 25.19% and 19.06%, respectively. Dongguk R&S was also up by more than 12%.

This surge is interpreted as a result of heightened trade tensions between the two countries, after China announced on October 9 that it would strengthen controls on rare earth exports, and U.S. President Donald Trump responded by declaring a 100% additional tariff on Chinese goods. Previously, Union Materials had also hit its upper price limit on October 10.

President Trump also indicated that he would not hold a separate meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju this month. However, he later took a conciliatory stance on his social networking service, Truth Social, stating, "The United States is not trying to hurt China, but to help China."

While rare earth-related stocks surged on concerns over renewed U.S.-China trade tensions, Samsung Electronics and SK Hynix remained weak. At the same time, Samsung Electronics fell by 1.91% and SK Hynix by 3.39%. The sharp decline in U.S. tech stocks on the New York Stock Exchange, triggered by concerns over rare earth disputes, was fully reflected in the domestic semiconductor sector on this Monday.

However, compared to the beginning of the session, the declines have partially narrowed. Kim Rokho, a researcher at Hana Securities, analyzed, "Since it is impossible to be free from tariffs, a stock price adjustment seems inevitable," but added, "During such adjustments, memory companies should take the opportunity to increase their holdings, as stock prices can rise based on fundamentals." In the case of Samsung Electronics, expectations that its preliminary third-quarter earnings, to be announced the next day, will exceed market forecasts are also seen as being partially priced in.