What's dragging the Mineral Resources share price lower on Tuesday?

We check what's going on with shares in the mining services company?

| More on:
A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Mineral Resources shares are down just over 1% to $56.39
  • A fall in iron ore prices, along with weakened investor sentiment across the Metals and Mining sector, is having a negative effect on Mineral Resources shares
  • The company announced it has successfully completed its recent US$1.25 billion senior unsecured notes offer

The Mineral Resources Ltd (ASX: MIN) share price is having a tough run today. This comes despite the mining services company providing an update on its recent senior unsecured notes offering.

At the time of writing, Mineral Resources shares are down 1.07% to $56.39.

Why are Mineral Resources shares pulling back?

While the company released a positive update at market open, the Mineral Resources share price has continued to seesaw.

The most likely catalyst is the retreat of iron ore prices, which will affect the company's revenue margins.

After reaching a year to date high of US$161.84 per tonne on 4 April, the steel-making ingredient has sunk to US$144.08 today. This reflects a loss of 10.97% or US$17.76 in a space of just four weeks. 

A slowdown in Chinese economic growth amid the government's COVID-19 lockdowns has led iron ore prices to plummet in value.

The second catalyst appears to be the broader market weakness. The S&P/ASX 300 Metals and Mining Index (ASX: XMM) is among one of the worst performers today, down 0.89% to 5,947.7 points.

The sector is made up of companies in the top 300 ASX companies involved with gold, steel, and precious metals.

Nonetheless, Mineral Resources advised it has completed its US$1.25 billion senior unsecured notes offering.

This comprises the first US$625 million senior unsecured notes priced at 8% per annum, maturing in 2027. The second US$625 million senior unsecured notes are priced at 8.5% per annum, expiring in 2030.

Management stated that it plans to use the cash proceeds for general corporate purposes, including for capital expenditures.

Mineral Resources share price snapshot

Year-to-date has produced relatively flat returns for Mineral Resources shares, up 1%. However, when factoring in the past 12 months, these gains are accelerated to almost 20% higher.

Based on valuation grounds, Mineral Resources presides a market capitalisation of roughly $10.70 billion.

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 Scott Phillips.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »