Why did the Pilbara Minerals share price tumble 22% in June?

A plethora of good news wasn’t enough to save this lithium stock from the June sell-off event.

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Key points

  • The Pilbara Minerals share price slumped 22% last month to close June at $2.29
  • Its downfall came amid a broader lithium sell-off, partly sparked by a broker's bearish outlook for the battery material's value
  • Pilbara's stock didn't escape the downturn despite the company releasing plenty of seemingly good news last month

June was a rough month for the Pilbara Minerals Ltd (ASX: PLS) share price despite plenty of good news from the ASX lithium stock.

As of the end of the month, the Pilbara share price was $2.29. That’s 22.37% lower than it was at the final close of May.

For context, the S&P/ASX 200 Index (ASX: XJO) slumped nearly 9% in that time.

So, what weighed on the ASX lithium favourite last month? Let’s take a look.

What happened to the Pilbara Minerals share price?

The Pilbara Minerals share price fell alongside other ASX lithium stocks last month. That’s despite plenty of seemingly good news coming from the lithium giant’s camp.

The company revealed its next CEO and managing director, former chief operating officer Dale Henderson.

It also announced key terms of a proposed joint venture with Calix Ltd (ASX: CXL). The venture could see a demonstration plant capable of producing lithium salts developed at the Pilgangoora Project.

Pilbara also announced it estimates Pilgangoora’s spodumene concentrate production increased 54% to between 123,000 and 127,000 dmt in the third quarter. That would see the company reaching the higher end of its previously outlined full-year guidance.

Perhaps more excitingly, it accepted a pre-auction bid before its sixth Battery Material Exchange (BMX) auction. The successful bid – US$6,350 per dry metric tonne (dmt) for 5,000 dmt on a 5.5% lithia FOB Port Hedland basis – was “evidence of the unprecedented demand for battery raw materials,” Henderson said. He continued:

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.

Henderson’s comments appear to reference a bearish note out of Goldman Sachs that seemingly contributed to a major sell-off event among lithium shares in early June.

The Pilbara Minerals share price tumbled 22% on 1 June. It then suffered a rollercoaster of smaller gains and falls over the rest of the month.

It has also started July in the red, down 0.66% to $2.275 at the time of writing.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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.

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