Lithium

Spodumene bids hit record US$5,955 at Pilbara Minerals' fifth lithium auction

Wed 25 May 22, 9:59am (AEST)
Lithium 12 Brine
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Key Points

  • The winning bid of US$5,955 tops last month's record of US$5,560
  • The result might come as a surprise after Chinese lithium prices topped out in early April
  • Fastmarket observes a pick up in Chinese lithium sentiment as lockdowns are lifted

Pilbara Minerals (ASX: PLS) has set another record at its lithium auction on Tuesday night, suggesting that lithium demand remains strong, even at elevated prices. 

The winning bid was US$5,955 per dry metric tonne (dmt) for a cargo of 5,000 dmt of spodumene concentrate.

Previous spodumene auctions recorded prices (dmt, free-on-board basis) of:

  • April 27 2022: US$5,650

  • October 2021: US$2,350

  • September 2021: US$2,240

  • July, 2021: US$1,250

Demand is still there

The highest bid of US$5,955 was 5.4% higher than Pilbara Minerals' April auction, even though, even though Chinese lithium prices have experienced a gradual decline since early April.

2022-05-25 09 24 12-Lithium - 2022 Data - 2017-2021 Historical - 2023 Forecast - Price - Quote - Cha
Source: TradingEconomics

Sentiment is picking up

Sentiment within China's domestic lithium market is looking more bullish according to commodity reporting agency, Fastmarkets.

Previous industry commentary suggested that lithium buyers and sellers were in somewhat of a deadlock, with sellers keeping their offers firm in expectation of higher prices and buyers expressing less interest in anticipation of lower prices due to lockdowns.

More recent commentary from Fastmarkets includes:

  • International consumer: “Demand for lithium hydroxide remains strong in the seaborne market, while spot supply is tight. Lithium consumers in Japan and South Korea are sending many inquiries to Chinese sellers.”

  • Chinese producer: “Chinese sellers are not lowering their offers for lithium hydroxide amid expectations of a price rise in the near term, when the Chinese market recovers from the most recent outbreaks of Covid-19.”

2022-05-25 09 48 00-Pilbara Minerals Ltd (ASX PLS) Share Price - Market Index
Pilbara Minerals 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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