Molycorp (MCP) Shorts Pinched as China Puts Squeeze on Unlicensed Rare Earth Mining

July 10, 2013 5:19 PM EDT
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Price: $0.36 --0%

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Molycorp, Inc. (NYSE: MCP) stock marched higher on Wednesday. Avalon Rare Metals Inc. (NYSE: AVL) and other rare earth stocks move higher as well. In an email statement obtained by Bloomberg, Avalon CEO Donald Bubar said there was no material change in business, and he related price appreciation to "renewed interest."

In comments made to Bloomberg, analyst Luisa Moreno of Euro Pacific tied the move to events in China. Reports out of China say the price increase in rare earth relates to a government campaign to shut down unlicensed mines in China's Ganzhau. Moreno thinks funds are buying a basket of related companies. Stocks may also be benefiting from a short squeeze.

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