The Galaxy Resources Limited (ASX: GXY) share price will be on watch on Thursday following the release of a production update this morning.
What did Galaxy announce?
Ahead of the release of its quarterly activities report for the December quarter on January 23, the lithium miner gave investors a sneak preview of what to expect.
According to the release, Galaxy achieved lithium concentrate production volume of 43,222 dry metric tonnes at its Mt Cattlin operation during the December quarter.
This is down from 50,014 dry metric tonnes in the September quarter, but is at the upper end of its guidance range of 35,000 to 45,000 dry metric tonnes.
Sales update.
Management also provided investors with an update on its sales during the quarter. Unfortunately, softening demand for lithium appears to have weighed on its sales, leading to a slight sales guidance miss.
Galaxy sold a total of 29,778 dry metric tonnes of lithium concentrate during the December quarter. This compares to its guidance range of 30,000 to 45,000 dry metric tonnes.
Furthermore, of the sales, just 14,778 dry metric tonnes was shipped during the quarter. The remaining 15,000 dry metric tonnes was not shipped.
This was because one of its customers, which has prepaid for 65% of the product, elected to delay its shipment until the first quarter of 2020.
Unfortunately, two key metrics that were not included in today's update were its unit cash cost and the price it received for its lithium.
Instead, investors will have to wait a couple of weeks to discover whether Galaxy's lithium prices have continued to weaken over the December quarter. But based on an update by Orocobre Limited (ASX: ORE) at the start of December, it seems quite likely that this will have been the case.
On December 3 Orocobre forecast lithium carbonate pricing for the December quarter of US$5,400 per tonne. This is down from US$7,111 per tonne in the previous quarter.
