Molycorp Shares Rally Amid Chinese Subsidy Rumor

Shares of Molycorp (NYSE: MCP) are up 10 percent following a report from FT late Wednesday which suggested Chinese officials may soon consider further rare-earth producer subsidies. A source has said the subsidies could be in the range of $35-40M. The real story here is related to Chinese regulators who have eased away from aiding the rare-earth sector over the last year or so. While the rumored size of the subsidies is slim, the fact that officials may be considering such a move suggests the government could be moving back toward aid. Avalon Rare Metals and Rare Elements shares are up 5 and 6 percent, respectively.