The Galaxy Resources Limited (ASX: GXY) share price is charging higher on Thursday morning.
At the time of writing, the lithium producer’s shares are up 6% to $4.23.
Why is the Galaxy share price charging higher?
Investors have been bidding the Galaxy share price higher today following the release of its second quarter update.
According to the release, Galaxy achieved record quarterly production of 63,321 dmt of lithium concentrate during the three months. This was in line with customer requirements.
Galaxy achieved this with a unit cash operating costs of US$328/dmt, which represents a 17% reduction on the prior quarter. It is also well short of its FY 2021 guidance of US$420 to US$450 per dmt. Though, its costs will increase in the second half as the first phase of pre-stripping activities at 2NW ramps up.
In addition, the company revealed lithium concentrate shipments of 48,499 dmt for the period, with an additional two shipments totalling 31,500 wmt completed early in July.
No details were provided on the price received for its lithium, other than it is selling contracted volumes on a spot pricing basis. It will also continue doing so for the remainder of 2021.
At the end of the period, Galaxy had a cash balance of US$208 million.
Also giving the Galaxy share price a boost today was management’s positive outlook commentary.
It commented: “Galaxy continues to experience strong demand for its spodumene concentrate as rising global EV sales increase the utilisation of spodumene converters in China. Contracting arrangements with long term customers are well advanced for further shipments of ~60kt in Q3, in addition to the 31,500 wmt already shipped in July.”
The company also revealed that demand for uncontracted production has been strong.
“Due to the strong production performance at Mt Cattlin in H1 2021, Galaxy had produced sufficient uncontracted volumes to enable a spot shipment to be sold in addition to contracted volumes. In mid-July Galaxy ran an auction process with selected buyers for 15kt of spodumene concentrate at 5.8% Li2O to be shipped in late Q3. A number of strong bids were received from parties throughout Asia and Galaxy expects to conclude the contract with the preferred buyer in July,” it added.