The Pilbara Minerals Ltd (ASX: PLS) share price will be on watch on Wednesday.
This follows the release of an announcement from the lithium miner this morning.
Why is the Pilbara Minerals share price on watch?
The Pilbara Minerals share price could be one to watch today after the miner released an update on the price it is receiving for its lithium spodumene.
According to the release, after a slight softening from its Battery Material Exchange (BMX) auction last month, prices on the BMX have rebounded in August.
The release notes that a cargo of 5,000 dry metric tonnes (dmt) at a target grade of ~5.5% lithia was presented for sale on the digital BMX platform, with delivery expected from mid-September.
Pleasingly, once again, strong interest continued to be received in both participation and bidding by a broad range of qualified buyers. This led to the company receiving a total of 67 bids online during the 30 minute auction window.
Pilbara Minerals ultimately decided to accept the highest bid of US$6,350 per dmt (SC5.5, FOB Port Hedland basis). On a pro rata basis for lithia content (inclusive of freight costs), this equates to a price of ~US$7,012 per dmt (SC6.0, CIF China basis).
How does this compare to last month?
The price Pilbara Minerals received is up from US$6,188 per dmt and ~US$6,841 per dmt, respectively, from July's auction.
This is a big positive, as last month's softness no doubt had some investors worrying that prices had peaked and were heading south. Today's BMX result appears to go against this theory.
As with previous auctions, the unnamed bidder is now required to enter a sales contract within 24 hours and will need to pay a 10% deposit by the weekend and present an irrevocable letter of credit from a recognised bank by mid-August.
