The Mineral Resources Limited (ASX: MIN) share price is up 59.2% year-to-date and has more than doubled in the past 12 months from $27.58 to higher than $60.
At the time of writing, the Mineral Resources share price is up 2%, trading at $61.19.
Looking back, shares in the mining company only started to gain traction in mid-2020, following the surge in iron ore prices.
How has Mineral Resources changed in recent years?
Mineral Resources has fundamentally been the same company over the years, operating mining services as well as iron ore and lithium production.
However, the weighting of these operations has drastically changed in the past two years.
In FY19, mining services delivered $209 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
By comparison, iron ore and lithium production generated $214 million and $70 million in EBITDA respectively.
Fast forward to FY21, and the company's earnings are far more skewed towards iron ore.
Mining services delivered EBITDA of $464 million, more than doubling FY19 figures.
However, iron ore EBITDA fired up almost fivefold on FY19 figures to $1,537 million.
During this time, iron ore production had lifted from 11.362 million tonnes in FY19 to 17,274 million tonnes in FY21.
Are iron ore prices driving the Mineral Resources share price?
Iron ore prices were relatively stagnant between 2017 and mid-2020, mostly trading around the US$85/tonne level.
During this time, the Mineral Resources share price also traded sideways between highs of ~$20 and lows of ~$12.
In early June 2020, Mineral Resources broke above pre-COVID highs of $19.59, the beginning of its monster run to $60.
During this time, iron ore prices rallied from ~US$100 in June to peak at ~US$230 in May.
What's the outlook?
The recent weakness in iron ore prices is likely a contributing factor to the stalling Mineral Resources share price.
The Australian reported commentary from UBS analyst Myles Allsop, who said: "We are cautious on iron ore prices in the medium term as supply is lifting and demand is moderating."
Allsop expects iron ore prices to stabilise by September, before falling to about US$100 a tonne next year, implying more than 50 per cent loss of value from the peak.
