23/06/2022 - 11:38

Lithium auction delivers higher price

23/06/2022 - 11:38


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Pilbara Minerals says its latest sale of spodumene concentrate defies recent suggestions the market for battery metals has peaked but it did nothing to reverse a sharp slide in lithium stocks.

Lithium auction delivers higher price
Dale Henderson says demand for battery metals remains strong. Photo: David Broadway

Pilbara Minerals has reported an increased price from its latest sale of spodumene concentrate, saying it defies recent suggestions the market for battery metals has peaked.

The Perth company said it accepted a bid lodged prior to its scheduled auction, for 5,000 dry metric tonnes (dmt) of spodumene concentrate – which is processed into lithium.

The offer was priced at US$6,350/dmt, for concentrate with a 5.5 per cent lithium content sold on a FOB Port Hedland basis.

Pilbara Minerals said this equated to an approximate price of US$7,017/dmt for concentrate with a 6.0 per cent lithia content sold on a CIF China basis.

This adjustment, for lithia content and freight costs, puts the latest sale onto a comparable basis for sales by other producers.

It represents the highest sale price achieved by Pilbara Minerals since it commenced auctions on its Battery Material Exchange in July last year.

The latest adjusted price compares to auction prices of $US6,586/dmt in May and $US6,250/dmt in May.

Incoming managing director Dale Henderson described the latest sale as an exceptional outcome.

“It provides further evidence of the unprecedented demand for battery raw materials being experienced across the global lithium-ion supply chain at this time,” he said.

"Contrary to recent suggestions that the market has peaked, the evidence we are seeing at the coal-face with our customers, including this pricing outcome, suggests that demand remains incredibly strong, with a continued healthy outlook for the foreseeable future.”

Today’s update comes three weeks after global investment banks Goldman Sachs and Credit Suisse dramatically revised their forecasts for the lithium market, sparking a sharp sell-off of lithium stocks.

Pilbara Minerals’ share price fell 22 per cent to $2.30 on that day.

It has since drifted lower to $2.02 compared to a high of about $3.60 in April.

Most other lithium stocks have followed a similar trajectory.


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