ASX lithium share Pilbara Minerals Ltd (ASX: PLS) ended up having a decent year. The Pilbara Minerals share price rose by 9.1% over 2023 and the S&P/ASX 200 Index (ASX: XJO) went up by 9.3%.
It was a close thing, but the ASX 200 just edged it, with names like Fortescue Ltd (ASX: FMG), Wesfarmers Ltd (ASX: WES) and Goodman Group (ASX: GMG) delivering big returns in 2023 to help the index win.
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What happened to the Pilbara Minerals share price?
It was an extremely volatile year for the ASX lithium share, as we can see on the chart below.
In August, the Pilbara Minerals share price reached a peak of $5.37 (up close to 50% in 2023 at that point), and in early December it had dropped to $3.23 (it was down 14% for 2023 by then).
The lithium price significantly declined over the 12 months.
In the three months to December 2022, the company's realised (lithium) spodumene concentrate sale price was US$5,668 per dry metric tonne (dmt).
In the three months to March 2023, the sales price had fallen to US$4,840 per tonne.
Then it dropped to US$3,256 per tonne in the three months to June 2023.
The latest quarter we know about was for the three months to September 2023, which showed an average price of US$2,240 per tonne.
It will likely be a few weeks until we hear about the three months to December 2023, but that may also show a decline in the lithium price.
As we can see, the lithium price more than halved over the year and that's bad news for profitability and Pilbara Minerals shares. Mining costs per tonne usually don't change much month to month, so extra revenue from a higher commodity price largely also becomes higher profit (aside from bigger payments to the government), but lower revenue largely cuts into profit.
However, it wasn't all negative news for the year. The company continues to make progress on developing its projects, including the P680 project, the P1000 project, its mid-stream demonstration plant project with joint venture partner Calix Ltd (ASX: CXL), and the downstream joint venture for the lithium hydroxide monohydrate chemical facility with POSCO.
Current earnings projection for the ASX lithium share
The ASX lithium share is still expected to make profit in FY24, but it could be significantly less than in FY23.
According to the projection on Commsec, the company is projected to make earnings per share (EPS) of 20 cents in FY24. That would put the ending Pilbara Minerals share price for 2023 at 20 times FY24's estimated earnings.
