Home / Sector / Materials Shares / Why is the Pilbara Minerals share price having such a top run today?

Why is the Pilbara Minerals share price having such a top run today?

Let's find out.

Posted by
Monica O'Shea
Monica is a journalist with experience working for Daily Mail Australia in Sydney and the Port Pirie Recorder and the Flinders News in South Australia. Monica completed a journalism cadetship in 2013. She also hold a B.Science (Biotechnology) with Honours from the University of Adelaide. Monica has worked in government at the local, state and federal level. Monica has a keen interest in finance and the share market and enjoys exploring the highs and lows. When not writing for Motley Fool Australia, Monica enjoys travel, sport, music, and likes to play the violin in her spare time.
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Key points
  • Pilbara Minerals shares are more than 3% in the green today 
  • However, in early morning trade, Pilbara shares rose 5% 
  • ASX lithium shares are following a similar trend to US lithium shares overnight 

The Pilbara Minerals Ltd (ASX: PLS) share price is storming ahead today.

Pilbara shares are rising nearly 3.27% to $3.635. However, in earlier trade, Pilbara shares were up 5%. For perspective, the S&P/ASX 200 Index (ASX: XJO) is lifting 0.92% today.

Let's take a look at why Pilbara Minerals shares are on the rise today.

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.

Image source: Getty Images

What's going on?

Pilbara is not the only ASX lithium share in the green today. Mineral Resources Ltd (ASX: MIN) shares are up 3.27%, while Allkem Ltd (ASX: AKE) shares are rising 2.82%.

ASX lithium shares including Pilbara appear to be following in the footsteps of multiple US lithium shares overnight.

Lithium giant Sociedad Quimica y Minera de Chile (NYSE: SQM) rose 5.7% on the New York Stock Exchange overnight, Albemarle Corporation (NYSE: ALB) shares jumped 4.5% and Livent Corp (NYSE: LTHM) lifted 2.25%.

This followed a visit from high-profile California Governor Gavin Newsom touting lithium as "white gold". He said in quotes cited by CNBC:

The entire industry has moved in this space. We want to dominate. We see this as the greatest economic opportunity, and we want to dominate in this space, and we're doing that

Meanwhile, data from Asian Metal, cited by Bloomberg overnight, shows the lithium price surged by more than 1,300% in two years.

On the flip side, the data also showed the lithium price in China has halved in four months.

Higher global supply of lithium and China's EV sector moderating could be reasons for this fall, the publication noted.

Morgans has recently recommended investors buy the Pilbara Minerals share price and placed a $4.70 price target on its shares. As my Foolish colleague James reported, Morgans believes demand from China could lift from March.

However, as my Foolish colleague Sebastian reported yesterday, UBS has recently placed a neutral rating on Pilbara Minerals shares. UBS believes new lithium supply could double between 2022 and 2025, potentially weighing on the lithium price.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price has risen 21% in the last year.

Pilbara has a market capitalisation of about $10.9 billion based on the current share price

Motley Fool contributor Monica O'Shea 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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