The Allkem Ltd (ASX: AKE) share price is in the red in early afternoon trade.
The S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for $12.28 per share. Shares are currently changing hands for $11.755 apiece, down 4.3%. At the same time, the benchmark index is up 0.01%.
Allkem's drop comes amid broader weakness today for all the ASX 200 lithium shares. And it follows this morning's release of Allkem's quarterly activity results for the three months ending 31 March.
We look at the highlights below.
Allkem share price dips despite improved cash position
- Quarterly revenue of US$315 million (unaudited)
- Gross operating cash margin of US$269 million, or 85%
- Progressed with proposed US$200 million project finance facility for the Sal de Vida Project by the International Finance Corporation
- Net cash at 31 March of US$578 million, up from US$552 million on 31 December
What else happened during the quarter?
The Allkem share price isn't getting a boost today, despite the miner reporting a new record March quarter for lithium carbonate production from its Olaroz Lithium Facility.
Olaroz produced 4,102 tonnes of lithium carbonate in the three months. That's up 38% on the previous corresponding period. Lithium carbonate sales of 2,904 tonnes generated record Olaroz quarterly revenue of roughly US$159 million. That went hand in hand with a record gross cash margin of 91%, or US$47,814/tonne.
The Olaroz Resource increased by 27% to 20.7 million tonnes of lithium carbonate equivalent (LCE) following expansion drilling and inclusion of the recently acquired Maria Victoria property.
Excluding shipments to Naraha, Allkem reported that third-party lithium carbonate sales for the quarter averaged US$53,175/tonne free on board (FOB). That's in line with the ASX 200 lithium company's guidance and a slight increase from the December quarter.
What's next?
Looking to what could impact the Allkem share price in the months ahead, the company said it expects the weighted average price for third-party sales of lithium carbonate products in Q4 FY23 to be approximately US$42,000/tonne, subject to final sales allocation.
Allkem is also optimistic about an uptick in EV sales. The company said, "Despite a slower start to the calendar year, global EV sales forecasts remain at ~14 million units, implying a steady acceleration during the remainder of 2023."
And it expects the lithium supply situation to remain tight.
"Whilst additional lithium supply is expected to be brought online in the near to medium term, the quantum of the increase is likely to continue to lag relative to consensus views on timing," the company said.
Allkem share price snapshot
As you can see on the chart below, the Allkem share price remains up 6% in 2023 despite today's retrace. Shares are down 11% over the past 12 months.
