Lithium prices trend higher, FY22 production to take a hit: Allkem

Lithium investors will have some numbers to chew on after a pricing update from Allkem (ASX: AKE). 

Lithium carbonate tops guidance

Realised lithium carbonate prices for the June quarter is expected to be approximately 14% higher than the company’s prior guidance at US$40,000/t.

This represents a 47% increase compared to March quarter prices of US$27,246/t.

“Customers continue to value security of supply which is reflected in a fully committed order book for the remainder of the calendar year,” the company said in a statement. 

Spodumene production takes a hit

Allkem flagged that FY22 spodumene production is expected to miss guidance by approximately 2-4% due to production delays. 

Full-year production is forecast to come in between 192,000 to 196,000 dry metric tonnes (dmt) compared to the company’s previous guidance of 200,000 to 210,000 dmt.

Factors including a delayed reopening of the WA border, covid-related challenges and a highly competitive resources labor market were to blame. 

Encouragingly, spodumene prices continued to trend higher, with Allkem expecting realised prices in the June quarter to hit US$5,000/t. 

No impact from new reference price

Allkem noted that Argentina’s Customs Agency recently set a reference price for lithium carbonate at US$53,000/t.

The company said that the price is not used for calculation of taxes, royalties or duties, and will not have any material impact on product exports, realised prices or profitability.