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Pilbara Minerals shrugs off lithium fears

Pilbara Minerals

Pilbara Minerals has achieved a new record from its Battery Material Exchange (BMX) – and the company didn’t even need to go to auction.

The lithium miner sold a shipment of 5000 dry metric tonnes (dmt) of spodumene concentrate (5.5 per cent lithia grade) for $US6350 ($9198)/dmt to a select group of registered BMX participants prior to the proposed auction date of Thursday June 23.

This $US6350/dmt offer equates to an approximate price of $US7017 ($10,164)/dmt on a 6 per cent spodumene concentrate CIF (cost, insurance and freight) China basis.

Incoming Pilbara Minerals managing director and chief executive officer Dale Henderson was ecstatic with the result.

“This is an exceptional outcome which provides further evidence of the unprecedented demand for battery raw materials being experienced across the global lithium-ion supply chain at this time,” he said.

“Contrary to recent suggestions that the market has peaked, the evidence we are seeing at the coalface with our customers, including this pricing outcome, suggests that demand remains incredibly strong, with a continued healthy outlook for the foreseeable future.”

The sale comes after Goldman Sachs released a bearish forecast on lithium’s prospects in early June, with the company suggesting “the battery metals bull market as over for now”.

“(There has been) a surge in investor capital into supply investment tied to the long-term EV (electric vehicle) demand story, essentially trading a spot-driven commodity as a forward-looking equity,” Goldman Sachs said.

“That fundamental mis-pricing has in turn generated an outsized supply response well ahead of the demand trend.”

However, leading lithium consultancy Benchmark Mineral Intelligence rebutted the report shortly after, with Henderson also adding his two cents at the time.

“It’s a fairly bold call to say the peak has occurred and the downhill trend will start within this calendar year,” he told The Australian Financial Review.

Henderson cited the success of Pilbara Minerals’ previous BMX auction and suggested that even though Goldman Sachs flagged strong future supply, there was still strong demand predicted.

Pilbara Minerals expects to hold its next BMX auction in the second week of July 2022.

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