Why is the Pilbara Minerals share price sinking 6% today?

What's going on with this lithium share today?

The Pilbara Minerals Ltd (ASX: PLS) share price is having a tough time on Thursday.

In morning trade, the lithium miner's shares are down over 6% to $4.25.

A man with his back to the camera holds his hands to his head as he looks to a jagged red line trending sharply downward.

Image source: Getty Images

Why is the Pilbara Minerals share price falling?

There have been a few catalysts for the weakness in the Pilbara Minerals share price this morning.

The first is overall market weakness after the US Federal Reserve lifted interest rates by 0.5% overnight. In addition, the central bank's closely followed "dot-plot" revealed that it expects rates to peak at 5.1%, which was higher than the market was expecting.

This appears to have put pressure on richly valued growth stocks today.

Another reason is a broker note out of Morgans, which has suggested that the Pilbara Minerals share price may have peaked. You can read about that here.

Finally, the release of the results from the company's latest battery material exchange (BMX) lithium auction this morning could be putting a spot of pressure on its shares.

BMX results

Although Pilbara Minerals continues to command a strong price for its lithium, it is lower than what it recorded a month earlier.

According to the release, the company has sold two cargoes for a combined total of 10,000 dry metric tonnes (dmt) at an average price of US$7,552/dmt (SC5.5, FOB Port Hedland basis). This is down 3.2% from US$7,805/dmt last month.

And while this is only a modest softening, it may have sparked fears that Goldman Sachs could be on the money with its forecast for lithium prices to crash over the next 12-18 months.

In case you missed it, Goldman has suggested that spodumene 6% could fall to an average of US$800 a tonne in 2024. That's a long way from the US$7,552 a tonne Pilbara Minerals is receiving for its 5.5% grade spodumene.

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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