Molycorp (NYSE:MCP): REO Prices Still Falling, but Consumers Are Returning – Morgan Stanley

Morgan Stanley is making some fairly positive comments on Molycorp (NYSE:MCP) saying falling rare earths prices have started to attract customers again.

– They think REO prices, down 25% YTD, have reached a level that will drive demand. A recovery in heavy REO prices may already be under way, with yttrium up in February. Heavy REOs should be followed by magnetic REOs (crucial to MCP’s earnings). MCP shares price in REOs at 30% of spot at full capacity.

Firm is reiterating Overweight rating and $81 PT.

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