Here's why the Pilbara Minerals share price is charging higher on Monday

This lithium giant is having a strong start to the week…

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The Pilbara Minerals Ltd (ASX: PLS) share price is charging higher on Monday.

In morning trade, the lithium miner's shares are up 4% to $5.28.

Why is the Pilbara Minerals share price charging higher?

There have been a couple of reasons for the rise in the Pilbara Minerals share price this morning.

The first is a strong gain by the S&P/ASX 200 Index (ASX: XJO) after a very positive end to the week on Wall Street. At the time of writing, the benchmark index is up 1.9% to 6,802.8 points.

This major improvement in investor sentiment has given riskier assets a big boost and sent lithium shares flying higher today.

What else?

Also giving the Pilbara Minerals share price a boost today has been the release of an announcement that reveals that the insatiable demand for lithium continues.

According to the release, the company has entered into a further contract of sale for an additional 5,000dmt cargo following completion of the BMX pre-auction held earlier this month.

Impressively, the company has commanded a price even higher than what it commanded from this month's auction.

Pilbara Minerals has entered into a sale contract for 5,000dmt SC5.5 FOB Port Hedland priced at US$7,255/dmt. This is the equivalent of ~US$8,000/dmt on an SC6.0 CIF China basis after adjusting for lithia content on a pro-rata basis and inclusive of freight costs.

As a comparison, last week, the company accepted a US$7,100/dmt pre-auction bid, which equates to a price of US$7,830/dmt on an SC6.0 CIF China basis.

As with the other cargo, delivery of this latest sale is expected to be made from mid-November. This means it will be part of the company's first half sales.

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.

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