Australian Strategic Materials share price sinks 12% following rally

Here’s what’s going wrong for the critical metals producer today.

| More on:
man bending over to look at red arrow crashing down through the ground

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

  • The Australian Strategic Materials share price is in the red today, falling 12% to trade at $5.06
  • It follows yesterday's 9% surge on the back of news of an US$15 million investment into the company
  • Korea's KCF Energy agreed to buy the parcel of shares, paying $8.90 for each new stock 

The Australian Strategic Materials Ltd (ASX: ASM) share price is handing back all of Monday’s gains and then some today.

At the time of writing, the Australian Strategic Materials share price is $5.06. That’s 12% lower than its previous close and 3.78% lower than it was at the end of Friday’s session.

For context, the broader market is in the green today. Right now, the All Ordinaries Index (ASX: XAO) is recording a 0.17% increase.

Let’s take a look at what’s going on with the critical metals producer this week.

Australian Strategic Materials share price tumbles

Australian Strategic Materials’ shares are plunging back into the red on Tuesday.

It surged 9% yesterday after it exited a trading halt with news Korea’s KCF Energy is investing US$15 million ($21.44 million at today’s exchange rate) to buy new shares in the company for $8.90 apiece.

The Seoul-based company also agreed to revise the pair’s framework agreement and negotiate a five-year offtake agreement for the supply of 2,800 dry metric tonnes of NdFEB alloy from the Korean Metals Plant.

The framework negotiations will see the companies discussing more investments in the ASX-listed critical metals producer.  

Thus, today’s drop could be a simple market correction after yesterday’s buying frenzy.

This week’s movements included, shares in Australian Strategic Materials are trading 55% lower year to date. Though, they have gained 19% since this time last year.

Motley Fool contributor Brooke Cooper 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 Share Fallers

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Share Fallers

Why Appen, ASX, Credit Corp, and Newcrest shares are dropping today

These ASX shares are under pressure on Wednesday...

Read more »

A woman sits at her computer with her hands clutched her the bottom of her face as though she may be biting her fingermails with a worried expression in her eyes and frown lines visible.
BNPL shares

The Openpay share price has cratered 40% in 3 days. What’s going on?

Why has the Openpay share price fallen off a cliff this week?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Appen, Credit Corp, Fortescue, and Santos shares are dropping

These ASX shares have been sold off on Tuesday...

Read more »

Researcher putting cannabis leaf in test tube.
Share Fallers

The Incannex share price has plunged 70% so far in 2022. What’s gone so wrong?

Downside continues over the past month for the cannabis stock.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Share Fallers

Why Aussie Broadband, Temple & Webster, United Malt, and Zip shares are dropping

These ASX shares are sinking on Monday...

Read more »

A young businesswoman looks shocked at what she's reading on the paperwork in her hand, with colleagues in the office in the background.
Share Fallers

This ASX healthcare share just crashed 49%, here’s why

Kazia's GBM Agile pivotal study has encountered a roadblock.

Read more »

A young man holds a small bottle of beer as he slumps sadly on one elbow in a comfortable chair with his head propped in his hand and staring into space with a dejected look on his face.
Share Fallers

United Malt share price plunges 13% on earnings downgrade

Recent challenges facing the ASX 200 company have persisted for longer than previously expected.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

These were the worst performing ASX 200 shares in July

These ASX 200 shares were sold off in July...

Read more »