The Metals Company (TMC), which experienced a striking stock rally last month due to heightened geopolitical tensions and excitement around critical minerals, is now facing a reality check as its stock value plummets below $5. However, there are signs of potential stabilization, with long-term buyers beginning to step in, hinting at a possible short-term recovery.
In October, TMC’s shares skyrocketed amidst speculation fueled by China’s export restrictions on critical minerals. This surge was short-lived, with the stock crashing back down due to a combination of profit-taking and easing diplomatic tensions, which diminished the urgency of investing in TMC. By mid-November, the stock had dropped to below $5 but has recently regained some ground, trading around $7.90 following a report from Deutsche Bank predicting an increased gold price forecast.
Deutsche Bank has raised its 2026 gold price prediction to $4,450 per ounce, up from an earlier estimate of $4,000. This new projection strengthens the environment for precious metals, which should be beneficial for companies like TMC engaged in rare earth extraction. The bank anticipates a broader trading range for gold, potentially impacting the rare earth markets positively.
After the recent volatility, TMC’s stock appears to be finding support around the 200-day moving average on daily charts, signaling that selling pressure may be easing. Despite the pullback, indications of stabilization could pave the way for cautious optimism among investors. The recent candle formations on weekly charts suggest indecision, but with price trends shifting upward, there may be opportunities for a short-term rebound.
The initial hype surrounding TMC’s rise was directly linked to the rare earth market’s supply concerns due to China’s restrictions. However, with improved diplomatic relations and reduced trade barriers, those fears have lessened, leading traders to lock in profits quickly. This shift highlights the fragile nature of the speculative rally, which relied heavily on headline-driven enthusiasm rather than solid fundamentals.
Long-term, TMC faces significant challenges. The ambitions of extracting metals like nickel and cobalt from the ocean floor remain unfulfilled, as commercialization of deep-sea mining is still on the horizon. The company continues to operate at a loss, and the capital needed to scale its operations is substantial. Reports of disappointing earnings and increased funding needs raise concerns about potential shareholder dilution and the company’s long-term viability.
Moreover, environmental concerns regarding deep-sea mining are intensifying. Scientists warn about the ecological impact of seabed extraction, which could lead to stricter regulations or potential bans, further complicating TMC’s plans. As it stands, while the company’s stock seems to be stabilizing after a severe decline, the outlook is clouded by ongoing financial challenges, regulatory uncertainties, and environmental risks.
Ultimately, whether TMC can convert its current upswing into a sustainable recovery depends on effective execution, securing necessary funding, and addressing both investor and environmental concerns.