In Pilbara Minerals’ fourth-quarter activities report, which covers the three months to December 31, the mining company reported a 9% increase in sales in the fourth quarter to 159,900 tonnes of spodumene, up from 146,400 tonnes in the previous quarter.
But realized prices for spodumene fell by 50% in the quarter, with the company reporting an average estimated realized price of $1,113 per tonne, compared with $2,240 per tonne in the previous quarter.
This realized price is on a 5.2% lithium content basis. When normalized to the market benchmark of 6%, the average estimated sales price was $1,280 per tonne.
Spodumene prices have declined significantly in recent months, with participants now questioning where the price floor could be.
This decline in prices has already led to production cuts and operational reviews within the industry.
Fastmarkets most recently assessed the spodumene min 6% Li2O spot price, cif China at $800-900 per tonne on Wednesday, narrowing downward by $50 per tonne from $800-950 per tonne in the previous session.
Spodumene prices are currently down by around 89% year on year.
Spodumene price volatility likely to continue
This decrease in estimated realized prices directly impacted the company’s revenue, which fell by 46% to 264 million Australian dollars ($174 million) quarter on quarter.
The company noted that volatility would likely continue in spodumene prices in the near term.
“Market pricing for spodumene concentrate and lithium chemicals is expected to remain volatile in the near-term given uncertain macroeconomic conditions and closely managed inventories within the supply chain,” the company said in its report.
Though the current price environment remains bearish, the company expressed its belief in the long-term growth of lithium demand.
“The long-term outlook remains positive with an expected structural deficit of lithium materials supply relative to expected demand for lithium-based products such as electric vehicles and battery energy storage,” the company said.
On this longer-term demand, the company announced on January 15 that it had amended its offtake agreement with Chinese lithium chemicals producer Ganfeng Lithium Group, increasing the allocation of spodumene to up to 310,000 tonnes per year from 2024, compared with 160,000 tonnes per year previously.
The agreement will be valid until the end of calendar year 2026.
Keep up to date with the latest lithium prices, data and forecasts on our dedicated lithium price page.
