The Arafura Resources (ASX:ARU) share price has tumbled 22% in a month. What's going on?

The Arafura share price is seemingly in a slump…

| More on:
Falling ASX share prices represented by girl falling asleep at her computer with her head in her hands

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

The Arafura Resources Limited (ASX: ARU) share price has been struggling over the past 30 days despite the company's silence. Over that period, it has slipped from 24 cents to trade at just 19 cents today, representing a 22.08% drop.

So, what might be weighing on the rare earth elements producer's stock lately? Let's take a look at what the company has been up to lately.

What's dragging on the Arafura share price?

Back in October, Arafura released its activities report for the first quarter of financial year 2022 detailing a 26% increase in the neodymium-praseodymium price.

The surge was spurred by global supply chain security risk, environmental legislation constraints, and strong demand for permanent magnets.

The last time the market heard non-price sensitive news from the ASX company was on 29 November when it released its annual sustainability report.

Within it, the company stated it is drawing up a plan to achieve its goal of reaching net-zero emissions by 2050. It also reiterated that it had signed on to the United Nations Global Compact in financial year 2021.

Arafura Resources' chair, Mark Southey, commented on the company's future plans:

2022 is going to be a year of delivery for Arafura. With ESG at the forefront of what we do since the beginning, we have great confidence in our strategy and our team to make a Final Investment Decision [on the Nolans Project] in [the second half of] 2022.

The Nolans Project houses neodymium-praseodymium in the Northern Territory.

However, the price of neodymium-praseodymium has flattened recently, which could be dragging on the Arafura share price.

According to the Shanghai Metals Market, the price of neodymium-praseodymium took off in late November. However, the latest price data as of 3 December showed the price had stagnated.

Interestingly, the Arafura share price didn't seem to respond to the neodymium-praseodymium price's upwards movement last month.

The company isn't alone in its slump. The share price of Arafura's fellow ASX rare earths developer, Australian Strategic Materials Holdings Ltd (ASX: ASM) has slipped by almost 16% over the past 30 days.

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 Bruce Jackson.

More on Resources Shares

Female miner smiling at a mine site.
Resources Shares

Up 60% this year, this ASX 200 mining stock just smashed production records

Production surge headlines quarterly results.

Read more »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Resources Shares

After lifting its price target, Macquarie now expects 36% upside from this ASX mining stock

The precious metals producer released better-than-expected production guidance.

Read more »

A miner in a hardhat and high visibility clothing makes a thumbs up symbol.
Resources Shares

4 reasons to buy Rio Tinto shares today

A leading expert forecasts strong growth potential for Rio Tinto shares.

Read more »

Man with rocket wings which have flames coming out of them.
Resources Shares

Why Macquarie expects this ASX All Ords copper stock could surge 38%

With costs coming in below expectations, this ASX All Ords copper stock could rocket higher over the coming months.

Read more »

Iron ore price Vale dam collapse ASX shares iron ore, iron ore australia, iron ore price, commodity price,
Resources Shares

Major miners up as China announces new mega project

Can a new mega-dam absorb iron ore oversupply?

Read more »

A young man sits at his desk with a laptop and documents with a gas heater visible behind him as though he is considering the information in front of him. about the BHP share price
Broker Notes

Leading broker has just downgraded BHP shares. Is it time to sell?

Macquarie sees little upside. But why?

Read more »

A young woman wearing a blue blouse with white polkadots holds her phone up with an intrigued and happy look on her face as she reads some news.
Resources Shares

3 reasons why the BHP share price could be a buy

Here are my optimistic thoughts on BHP.

Read more »

mining asx shares represented by miner writing report on clipboard
Resources Shares

This ASX 200 miner is ramping up copper output as prices reach all-time highs

Copper production leads quarterly update.

Read more »