September has not been a great month for the Mineral Resources (ASX:MIN) share price

It’s been a difficult month for Mineral Resources shareholders…

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Shares in Mineral Resources Ltd (ASX: MIN) have had a tough run this month, falling more than 15%. This comes despite the mining services company completing the acquisition of the RHIOJV interest, and announcing the drilling results at Lockyer Deep-1.

At the time of writing, the Mineral Resources share price is down a further 2.97% to $46.37.

Why are Mineral Resources shares pulling back?

While the company released two positive updates in September, the Mineral Resources share price has continued to fall.

A major catalyst appears to be the recent retreat of iron ore prices, which impacts the company’s revenue margins.

After reaching a record high of US$229.50 per tonne in May, the steel-making ingredient has sunk to US$120.73 today. This reflects a loss of 15.82% or US$22.63 in a space of just three weeks. 

A slowdown in Chinese demand amid political pressure has also led iron ore prices to plummet in value.

The broader market weakness on the S&P/ASX 200 Index (ASX: XJO) may be another factor in the sluggish Mineral resources share price. The index is about 2.5% off since the start of the month.

On 17 September, the index plunged to its biggest one-day fall in more than 6 months, shedding 2.1%. This had a knock-on effect for Mineral Resources shares, which dropped a hefty 8.53% to a 3-month low of $48.26 at the time.

What’s next?

While the macro factors appear to unsettle the Mineral Resources share price, the company itself has been progressing along internally.

In the most recent results provided to investors in August, the company highlighted its growth strategy for FY22.

Mineral Resources said it would implement a range of solutions which include enhancing crushing, processing and haulage contracts. In addition, the company expects to develop significant transport and port facilities with larger payloads and quicker processing.

The company is forecasting mining services volumes to increase between 15% to 20% over FY21. Capital expenditure guidance is estimated to be approximately $650 million.

Mineral Resources share price snapshot

Year-to-date has seen decent returns for the Mineral Resources share price, up more than 25%. However, when factoring in the past 12 months, these gains are magnified to almost 90% higher.

Mineral Resources presides a market capitalisation of roughly $8.88 billion, and has close to 189 million shares on its books.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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