The Mineral Resources Ltd (ASX: MIN) share price is having a tough run today. This comes despite the mining services company providing an update on its recent senior unsecured notes offering.
At the time of writing, Mineral Resources shares are down 1.07% to $56.39.
Why are Mineral Resources shares pulling back?
While the company released a positive update at market open, the Mineral Resources share price has continued to seesaw.
The most likely catalyst is the retreat of iron ore prices, which will affect the company’s revenue margins.
After reaching a year to date high of US$161.84 per tonne on 4 April, the steel-making ingredient has sunk to US$144.08 today. This reflects a loss of 10.97% or US$17.76 in a space of just four weeks.
A slowdown in Chinese economic growth amid the government’s COVID-19 lockdowns has led iron ore prices to plummet in value.
The second catalyst appears to be the broader market weakness. The S&P/ASX 300 Metals and Mining Index (ASX: XMM) is among one of the worst performers today, down 0.89% to 5,947.7 points.
The sector is made up of companies in the top 300 ASX companies involved with gold, steel, and precious metals.
Nonetheless, Mineral Resources advised it has completed its US$1.25 billion senior unsecured notes offering.
This comprises the first US$625 million senior unsecured notes priced at 8% per annum, maturing in 2027. The second US$625 million senior unsecured notes are priced at 8.5% per annum, expiring in 2030.
Management stated that it plans to use the cash proceeds for general corporate purposes, including for capital expenditures.
Mineral Resources share price snapshot
Year-to-date has produced relatively flat returns for Mineral Resources shares, up 1%. However, when factoring in the past 12 months, these gains are accelerated to almost 20% higher.
Based on valuation grounds, Mineral Resources presides a market capitalisation of roughly $10.70 billion.
The post What’s dragging the Mineral Resources share price lower on Tuesday? appeared first on The Motley Fool Australia.
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