The Pilbara Minerals Ltd (ASX: PLS) share price has fallen 60% over the past year, as the chart below shows. Brave investors may be seeing an opportunity with this current valuation.
Just because a business valuation has fallen, doesn't mean it's destined to go up again, particularly to its former peak.
However, resource prices and ASX mining shares are some of the most likely things to be cyclical, in my view, with a potential for a rebound.
Will lithium act with a cyclical nature? It has been impacted by changes in supply and demand over the years – both are growing. Time will tell what happens in the coming years.
The question is – are Pilbara Minerals shares appealing today, considering the current valuation, the lithium market and the performance of the business?
Let's look at the latest update from the ASX lithium share.
Quarterly update
The company recently gave a quarterly update for the three months to 31 March 2025.
Pilbara Minerals reported that it produced 125kt of lithium (spodumene), down 34% quarter over quarter, while it sold 125.5kt of lithium, down 39% quarter over quarter.
Pleasingly, the company announced that its realised price rose by 7% quarter over quarter to US$747 per tonne on an SC5.3 basis.
On the expenditure side of things, the unit operating cost (CIF China) increased 9% quarter over quarter in Australian dollar terms to A$796 per tonne, and it rose 4% in US dollar terms to US$499 per tonne.
The company's cash balance fell 9% quarter over quarter to A$1.1 billion. The key driver of that $109 million reduction was capital expenditure, though it has now largely finalised its investment phase and is now focused on "optimisation".
The P1000 project tie-ins and ramp-up have been completed to plan. The Pilgan plant optimisation is targeted for completion before the end of FY25. This will "support higher production volume and lower unit costs".
Is the Pilbara Minerals share price a buy?
A major part of the company's success may depend on what happens with the lithium (spodumene) price, which has been difficult to forecast accurately in the last few years.
UBS recently reduced its short-term lithium forecast by around 10%, reducing the estimate for 2026 down to US$763 per tonne. It also reduced its long-term price forecast by US$100 per tonne to US$1,300 per tonne.
However, the ASX lithium share highlighted that in January, February and March, electric vehicle sales were up 16%, 50% and 29% year over year, respectively. Electric energy storage system demand is expected to grow by 68% year over year and account for around a third of the additional lithium demand in 2025.
While the current lithium price has fallen further than investors may have expected a couple of years ago, it's possible that lithium demand could increase further than investors are currently expecting.
I think it'd be a flip of the coin to expect lithium prices to soar within the next two or three years, which isn't the type of investment I normally make for my own portfolio.
For me, businesses involved in copper mining could make stronger longer-term investments.
