Here’s what led the Mineral Resources share price to sink 25% in June?

Minerals Resources shares have struggled to regain composure.

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Key points

  • Mineral Resources shares have tumbled 25% in the past month despite no company announcements
  • A bearish lithium report from Goldman Sachs, along with the deteriorating price of iron ore, has impacted the mining services company's shares
  • During today's trading session, Mineral Resources shares hit a three-month low of $45.30

The Mineral Resources Ltd (ASX: MIN) share price continued to fall by the wayside throughout the past month.

This came despite the company making no price-sensitive announcements to the ASX during the period.

The iron ore and lithium miner’s shares started at $63.85 from market close on May 31 and finished at $48.27 on 30 June. That represents a decline of around 25% for investors who decided to hang on.

And it appears the blood-letting hasn’t stopped. Mineral Resources shares ended today at $45.96, down another 0.69%.

Let’s take a closer look and see what’s been dragging on the company’s shares lately.

What’s weighing down Mineral Resources shares?

Investors are offloading the Mineral Resources share price as weak sentiment, mixed with strong volatility, hits the mining services company.

A sharp drop at the beginning of June came amid Goldman Sachs’ bearish analysis on the battery metals market.

The broker forecast lithium prices to sink to roughly US$16,400 per tonne by the end of next year.

For context, the battery-making ingredient is currently fetching US$72,000 per tonne.

Nonetheless, the negative report heavily impacted shares across the lithium space, with Mineral Resources tumbling 10% on the news.

Further, a general decline in the ASX brought on by a gloomy economic outlook also dragged down the company’s shares.

Iron ore prices also dropped from their lofty highs to around US$130 per tonne at the end of June. This reflected a 5% decline for the month and its lowest level since January 2022.

Investors expressed their concern by dumping Mineral Resources’ shares, particularly on 17 June regardless of no news coming from the company. Almost five million of its shares swapped hands on that day compared to its historical average of 1.5 million shares.

Mineral Resources share price snapshot

Adding to the heavy losses for the month, Mineral Resources shares are down 18% since the start of 2022.

On valuation grounds, Mineral Resources presides a market capitalisation of roughly $8.7 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.

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