The Arafura Resources Limited (ASX: ARU) share price is taking a beating today amid a harsh day for the ASX materials sector.
Shares in the rare earths developer are currently 13.16% lower at 33 cents apiece.
The S&P/ASX 200 Materials Index (ASX: XMJ) is one of the worst-performing sector indices this afternoon, currently down 4.58%.
It should come as no surprise that other ASX mining shares are also taking a beating. St Barbara Ltd (ASX: SBM) is down 9.15% while Emerald Resources NL (ASX: EMR) is trading 8.04% lower.
The S&P/ASX 200 Index (ASX: XJO) is also having a rough start to the week, down 1.19%.
What's surprising is there's no news from Arafura — or about the materials sector more broadly — to make sense of the sell-off today. But let's recap some recent events for the company.
What's going on with the Arafura share price?
Arafura's latest update on Tuesday last week did nothing to help boost investor sentiment. The rare earths company reported a $35 million loss for FY22, up 448.7% from FY21.
Most of the costs incurred over this period went to getting the company's Nolans project ready for production. The first ore commissioning of neodymium (NdPr) is expected to be seen in May 2025.
The report said the company's long-term expectation is to supply around 5% of the world's NdPr oxide demand.
Some good news for Arafura was that it was included in the S&P/ASX 300 Index (ASX: XKO) on Monday last week due to changes in the company's market capitalisation. The share price shot up more than 8% on the day.
On a broader level, Arafura's shares have moved in step with the market as a whole. Inflation and rising interest rates have put pressure on equities and since Arafura is still scaling its production, this may be affecting investor sentiment.
Arafura share price snapshot
Despite today's losses, the Arafura share price is up almost 60% year to date. Meanwhile, the S&P/ASX 200 Index is down around 13% over the same period.
The company's market capitalisation is around $586 million.
