Why is the Mineral Resources share price sinking 9% today?

Commodity prices have retraced on fears China's economic growth is rapidly slowing.

| 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

  • Mineral Resources share price down 9% at lunchtime 
  • The mining services company is facing headwinds as ASX resource shares selloff today 
  • Mineral Resources reported its intent to issue US$1 billion of senior unsecured notes 

The Mineral Resources Limited (ASX: MIN) share price is taking a beating today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining services company closed at $60.70 on Friday and are currently trading for $54.98. That puts the Mineral Resources share price down 9.4%.

So, what's going on?

Resource outlook clouded by China's slowing growth

First, it's not just the Mineral Resources share price that's under pressure today.

At time of writing the S&P/ASX 200 Resource Index (ASX: XJR) is down 5.2%.

This comes amid a global selloff in commodities and energy.

Copper, as one example, is down 3.3% overnight. That brings the red metal down 5.2% since this time last week.

Iron ore, Australia's top export earner and a primary focus for Mineral Resources is taking an even bigger hit, down 9.7% to $US135.75 per tonne.

Meanwhile, energy producers haven't been spared either, with Brent crude oil down 9% over the past week.

Resource prices are sliding amid fears that China's economic growth will take a big hit from the nation's zero-virus policy. As COVID-19 continues to spread, it appears that Shanghai may be in for extended lockdowns, hitting supply chains and crimping demand for commodities.

What else is impacting the Mineral Resources share price today?

Mineral Resources could also be under pressure following an ASX announcement this morning.

According to the release, the mining services company intends to offer US$1 billion of Senior Unsecured Notes. Mineral Resources said the notes will only be available to investors "reasonably believed to be qualified institutional buyers".

The company plans to use the cash proceeds for "general corporate purposes, including for capital expenditures".

Mineral Resources share price snapshot

With today's intraday drop factored in, Mineral Resources shares are down 5.8% so far in 2022. By comparison, the ASX 200 is down 3.3% year-to-date.

Taking a step back, longer-term investors will have little to complain about.

Over the past 5 years, the Mineral Resources share price has gained 416%.

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 Share Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

A smartly-dressed man screams to the sky in a trendy office.
Share Fallers

Why Appen, DroneShield, PWR, and Webjet shares are sinking today

These shares are having a tough time on hump day. But why?

Read more »

a car driver sits up and looks alert with wide eyes and an expression of concentration while he holds the wheel of a car.
Share Fallers

Why this ASX All Ordinaries stock just crashed 24%!

Investors are punishing the ASX All Ords company today. Let’s find out why.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Elders, KMD, Lovisa, and Telix shares are dropping today

These shares are missing out on the good times on Tuesday. But why?

Read more »

A woman with short brown hair and wearing a yellow top looks at the camera with a puzzled and shocked look on her face as the Westpac share price goes down for no reason today
Share Fallers

Why Life360, Lovisa, NAB, and Resolute shares are falling today

These shares are starting the week in the red. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Healthcare Shares

This ASX All Ords share is diving 18% as inflation pain draws blood

This healthcare company delivered a trading update at its annual general meeting today.

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

Why Healius, Opthea, Peninsula Energy, and Wildcat shares are falling today

These shares are having a tough finish to the week. But why?

Read more »