Pilbara Minerals share price storms higher amid ‘unprecedented demand’ for lithium

This lithium share is having a good day…

| More on:
a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Pilbara Minerals' shares are storming higher on Thursday morning
  • This follows news that the company has accepted a bid for its lithium cargo before its next digital auction even started
  • Pilbara Minerals has accepted the equivalent of US$7k per dry metric tonne, up from US$6.6k last month

The Pilbara Minerals Ltd (ASX: PLS) share price is racing higher on Thursday morning.

In early trade, the lithium miner’s shares are up 6% to $2.19.

Why is the Pilbara Minerals share price jumping?

Investors have been bidding the Pilbara Minerals share price higher today following the release of an update on the company’s Battery Material Exchange (BMX) auction.

According to the release, before the sixth scheduled digital auction has even commenced, Pilbara Minerals has received and accepted a bid for a spodumene concentrate cargo.

The winning bid was US$6,350 per dry metric tonne (dmt) for 5,000 dmt on a 5.5% lithia FOB Port Hedland basis.

This equates to an approximate price of US$7,017 per dmt on a SC6.0 CIF China basis after adjusting for lithia content on a pro rata basis and freight costs, which is up from US$6,586 per dmt last month.

The release reveals that a deposit has been taken and the shipment is expected to be made in late July.

‘Unprecedented demand’

Pilbara Minerals’ incoming managing director and CEO, Dale Henderson, was delighted with the news and hit out at suggestions that lithium prices may have peaked.

He commented:

This is an exceptional outcome which provides further evidence of the unprecedented demand for battery raw materials being experienced across the global lithium-ion supply chain at this time.

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.

All eyes will be on Pilbara Minerals’ next BMX auction in the second week of July to see if this strong pricing continues.

Motley Fool contributor James Mickleboro 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.

More on Materials Shares

a man wearing a hard hat and a high visibility vest stands with his arms crossed in front of heavy equipment at a mine site.
Materials Shares

Why did the Lynas Rare Earths share price tumble in June?

We check how the rare earths producer fared last month.

Read more »

Woman in yellow hard hat and gloves puts both thumbs down
Materials Shares

South32 share price heads 8% south on high volumes, but why?

South32's shares are heading south today. But why?

Read more »

Broker looking at the share price on his laptop.
Broker Notes

Broker upgrade fails to stop the OZ Minerals share price from falling today

The copper price has dived on fears of a looming global recession.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Materials Shares

Why did the Sayona Mining share price crash 32% in June?

Last month was a tough one for this ASX lithium developer.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Materials Shares

Can ASX lithium share Pilbara recover in July after slumping 22% in June?

One broker is predicting 90% upside for the lithium producer.

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.

Here’s why the St Barbara share price shone 8% brighter today

What's going on with the gold miner on Tuesday?

Read more »

A person wears a roaring lion mask.
Materials Shares

Own Liontown shares? Here are 3 takeaways from the company’s investor presentation

What did today's presentation reveal?

Read more »

A mining worker wearing a white hardhat stands on a platform overlooking a huge mine as ASX 200 mining shares fall over the month of June
Materials Shares

Down 25% in a month, what is the outlook for the Allkem share price in July?

Could the lithium company's share price turn around in July?

Read more »