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Why is the Mineral Resources share price gaining 4% on Tuesday?

Investors may have refreshed their appetites for lithium and materials shares.

Posted by
Matthew Farley
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and US equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.
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Key points
  • Materials shares, including Mineral Resources, are rising along with the broader market this afternoon
  • The euphoria around lithium shares may not yet have peaked
  • Analyst consensus is that a spin-off of Mineral Resources' lithium business would be beneficial for shareholders

The Mineral Resources Limited (ASX: MIN) share price is up today amid a recovery in the materials sector.

The ASX 200 miner's shares are up 4.14%, while the S&P/ASX 200 Materials Index (ASX: XMJ) is one of the best-performing sector indices today with a 2.09% gain.

It might not be surprising, then, that some of Mineral Resources' peers have also recovered from yesterday's sell-off. Pilbara Minerals Ltd (ASX: PLS) is up 6.35%, and Newcrest Mining Ltd (ASX: NCM) is rising 0.44%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is currently enjoying a 0.27% gain.

So what's going on? Let's investigate.

A young woman sits with her hand to her chin staring off to the side thinking about her investments.

Image source: Getty Images

What's going on with the Mineral Resources?

Investors seem to have refreshed their appetites for shares of Mineral Resources after they suffered a sizable loss yesterday, as the Motley Fool reported. The Mineral Resources share price ended the day 7.94% in the red.

The coverage included the fact that a broker rated the company's shares a hold and that a speculated demerger of its lithium business "could create value".

Other ASX lithium shares were also sold off on Monday, with some losing as much as 16.9%.

So with the broader market moving upwards and no news announced from the company, investors may surmise that the prices of these and other lithium shares are too good to pass up.

Mineral Resources share price snapshot

The Mineral Resources share price is up almost 11% year to date and 36% over the past 12 months. Meanwhile, the ASX 200 is down 14.5% in 2022 and 12% in the past year.

Mineral Resources has a market capitalisation of $11.79 billion.

Motley Fool contributor Matthew Farley 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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