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.
The post The Arafura Resources (ASX:ARU) share price has tumbled 22% in a month. What’s going on? appeared first on The Motley Fool Australia.
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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.
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