Pilbara Minerals boss hits out at lithium market jitters
Market reactions in the ASX lithium sector are often disproportionate responses to a small piece of market pricing, says Pilbara Minerals boss Dale Henderson.
ASX-listed lithium stocks fell sharply on Monday, in what Mr Henderson suspects was the latest outsized reaction.
The selldown came after China’s first futures contract for lithium got off to a shaky start in trading on the Guangzhou Futures Exchange last Friday, closing 13 per cent lower than the base settlement price of 246,000 yuan ($50,817) a tonne for lithium carbonate.
Mr Henderson speculated the Guangzhou result was linked to the Pilbara Minerals share price closing 5.75 per cent lower at $4.59 on Monday.
The stock bounced back 5.2 per cent in trading on Tuesday despite Pilbara Minerals reporting a 33 per cent drop in spodumene concentrate prices in the June quarter. The weaker prices took the shine off the company setting new production and sales benchmarks.
“Sometimes in the lithium market, we’ve had these small data points that materially impact the industry,” Mr Henderson said. “And I think this is just the latest example of that, and it is an outsized reaction in my view.
“You’ve got groups who are solely dedicated effectively to analysing and understanding the industry, the likes of Benchmark Minerals and Fastmarkets and so on.
“And then you have a singular trade, or a couple of trades, or it’s thin volume and everyone’s attention gravitates to that. It’s just disproportionate. I don’t feel it should have the weight that’s given in terms of an indicator of the market direction.”
Pilbara Minerals sold its 5.3 per cent-grade spodumene concentrate at average price of $US3256 a tonne into Chinese markets in the June quarter, down from $US4840 in the March
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