From Dysprosium to Dystopia- Are there any plays to be made here? Or are we just completely screwed?
Just responded to a great post from someone else on here about most embarrassing bag I hold. So, I figured I would fully embarrass myself with a question (and another bag) that I think I already know the answer to but maybe someone that is a better investor than me has an angle on.
First, the all important pretext: [China Just Turned Off U.S. Supplies Of Minerals Critical For Defense & Cleantech](https://cleantechnica.com/2025/04/05/china-just-turned-off-u-s-supplies-of-minerals-critical-for-defense-cleantech/)
I will also add two really important pieces to the article:
1. China makes all the raw materials for catalytic converters that go in ICE vehicles. Those are going to be cut off too which will hit our auto sector hard.
1. You need tungsten for TIG welding operations (critical to our domestic manufacturing).
I'll spare you all the 100-page rant of an engineer that has seen the slow and steady destruction of manufacturing in America for over 20-years and I'll summarize it with this: All of our business and policy decisions are made by some version of the guy you were probably roommates with in college that smoked pot and sat in his room playing Madden all day. China has understood this all along and has steadily and strategically grabbed critical pieces of critical raw material production and manufacturing that were moving along in tandem with new technology developments. And we blissfully, knowingly, and foolishly allowed them to do it for decades for a little more profit on the bottom line. Nobody can be mad at China for being smarter than us. We did this to ourselves.
Now, the Trump administration is trying to play a hand we simply do not hold. And nobody knows this more than China because they hold all the cards. We gave them away to them long ago.
I don't expect many people to understand just how important the materials are that are listed in the article above. You don't need to. China does. And this is bad. Worse than you think. For one example, here is bad news for NVIDIA (source: [China Tightens Its Hold on Minerals Needed to Make Computer Chips](https://www.nytimes.com/2024/10/26/business/china-critical-minerals-semiconductors.html)):
"*In the last few years, Nvidia and other computer chip manufacturers have changed the material used in hundreds of tiny electricity management devices, called capacitors, on each chip. The capacitors are now made from ultrapure dysprosium. China’s refineries produce 99.9 percent of the world’s dysprosium, mostly at a single refinery in Wuxi, near Shanghai.*"
\*I do not hold any position in NVIDIA and think they are a badass company. I use their chips and depend on them for my profession and livelihood. I think this news sucks for everyone. To be blunt- I'm pissed.
Think of it this way: This is going to be like all the 99% finished cars that were piling up in our ports without the semiconductor-based components needed to make them run during COVID but with many other products as well. That was because of a global pandemic. This is going to be because of the tariffs. And to boot, everyone, and I mean the whole world (and even a few penguins), is going to work against us now (all at once). Again, we did this to ourselves.
Being smart in science has never translated into being a good investor for me. I am reminded of that every time I sit next to my old roommate's beautiful pool. Foreseeing issues with critical raw materials and fragile supply chains solely dependant on China, I bought into Westwater Resources ($WWR) years ago and it has proven to be a terrible investment. I am not suggesting you to buy it. I am using it as an example of why I am a bad investor. It's a dog. Beware.
I suspect that the answer to what I am about to ask is either going to be:
1. Sit on cash and wait for things to turn around and the buying opportunity.
1. Play in options and short sell the many companies about to get hit with this (not my thing).
1. Accept that this is a trade "war" and just a lose-lose situation for everyone. Basically, bite leather.
But I'll ask anyway: Does anyone see an angle or a publicly traded company that will actually benefit from this?
