Neometals share price drops 8% amid China slowdown fears

The Neometals Ltd (ASX: NMT) share price is plunging today despite a rebound in the broader market.

Shares of the minerals developer currently trade 8.25% lower at $1.335 apiece.

To put this into context, the S&P/ASX 200 Materials Index (ASX: XMJ) is up 0.03% for the day so far while the benchmark S&P/ASX 200 Index (ASX: XJO) is 0.31% ahead.

At the same time, two of Neometals’ peers have recovered from yesterday’s market rout triggered by US equities having their worst day in two years.

Argosy Minerals Limited (ASX: AGY) is the big winner of the two, up 3.77% at the time of writing while St Barbara Ltd (ASX: SBM) is also up a more modest 0.56%.

There are no announcements to report on for Neometals this afternoon. But it seems there may be broader factors at play. Let’s investigate.

What’s going on with the Neometals share price?

There have been numerous media reports of China’s expected economic slowdown which, in turn, could pressure the demand for titanium and vanadium, two of Neometal’s key operating segments.

This afternoon, The Straits Time reported that China could enter into a renewed economic slowdown. It said several factors could play a part, including its real estate crisis, continuing COVID-19 policies, and falling international and domestic demand for its goods.

The sentiment may be dampening enthusiasm for Neometals shares today.

However, prior to today’s slump, Neometals has updated the market with a seemingly uninterrupted stream of good news.

On Tuesday, the company announced cost estimates for the first phase of its integrated battery recycling plant, planned to be built in Germany. It will be Europe’s first integrated discharging and disassembly operation, with capacity to process larger units from electric vehicles.

And in July, the company announced its vanadium recovery project could see it produce the element at highly competitive prices.

Neometals is working to secure a 50% stake in a venture aiming to recover vanadium from the steel-making by-product, slag.

So while Neometals has made significant progress of late, it shows no company is immune to changes in its macro backdrop.

Neometals share price snapshot

The Neometals share price is down almost 19% year to date but up 53% in the past 12 months.

By comparison, the ASX 200 is down almost 10% in 2022 so far and nearly 8% lower over the past year.

The company’s current market capitalisation is $737 million.

The post Neometals share price drops 8% amid China slowdown fears appeared first on The Motley Fool Australia.

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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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