Pilbara Minerals (ASX:PLS) share price rallies 14% in just four days

Shares in the largest ASX-listed lithium producer are surging.

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A drawing of a white rocket streaking up, indicating a surging share pirce movement

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We’re only four days into August but the Pilbara Minerals Ltd (ASX: PLS) share price has managed to go up 17.5% to a fresh record high of $2.11 on Thursday.

As equally as impressive is its year-to-date and 12-month performance, surging 136% and 488% respectively.

With a seemingly outstanding share price performance at every time frame, what’s the rocket fuel behind the Pilbara Minerals share price?

The lithium sector is running hot

Whether it’s an aspiring lithium explorer or an emerging producer, ASX-lithium shares are running to multi-year or record all-time highs across the board.

On the larger end of town, Galaxy Resources Limited (ASX: GXY) is up 113% year-to-date to decade highs, while the Orocobre Limited (ASX: ORE) share price has added 90.75% year-to-date to all-time record highs.

Emerging lithium producers such as Vulcan Energy Resources Ltd (ASX: VUL) and Core Lithium Ltd (ASX: CXO) have rallied strongly in August, up 15% and 17% respectively.

Lithium explorers including Liontown Resources Limited (ASX: LTR) and Lake Resources N.L. (ASX: LKE) have also surged in valuation, up a respective 7.1% and 31% in August.

The bullish performance of the lithium sector bodes well for the strong performing Pilbara Minerals share price.

Lithium spot price recovery

In the same way, surging iron ore spot prices have helped prop up iron ore majors such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). A strong rebound in lithium prices in the last 8 months has helped the Pilbara Minerals share price to make a quick U-turn from multi-year lows in late 2020 to record highs today.

Orocobre’s quarterly results are a good example that its lithium margins have rebounded in the last 12-months.

Back in the June quarter of 2020, Orocobre was selling its lithium carbonate for US$3,913/tonne despite cost of sales of US$3,920.

These challenging conditions resulted in a net loss of $67.1 million for the company for FY20.

Fast forward to today, Orocobre reported average sales pricing of US$8,476/tonne.

Why the Pilbara Minerals share price is trading lower on Thursday

In light of all the positive commentary and hype around the lithium sector, the Pilbara Minerals share price has edged 1.94% lower to $2.03 on Thursday.

The broader ASX lithium sector is pulling back, with heavyweights Galaxy and Orocobre also trading 0.62% and 0.47% lower.

Despite a red day today, these lithium shares have all rallied strongly in the past few days.

So perhaps it is only natural to see some profit-taking and selling pressure take place.

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Motley Fool contributor Kerry Sun owns shares of Core Exploration Ltd. and Vulcan Energy Resources Limited. 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 Bruce Jackson.

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