Speaking at the Resources Rising Stars Summer Series in Sydney this morning, Henderson said there was strong support for lithium chemicals pricing at around the US$75,000 per tonne mark.
“And I note that the most recent update from Platts, which came in last night, showed a further increase to chemicals pricing for the international markets outside of China and they also show just a slight decrease in the domestic pricing over the past week, but still strong support,” he said.
“So in the near term, we have a very positive outlook.”
Henderson said Pilbara received positive feedback from one of its major customers last week.
“We were quite heartened by their bullish view and their particular expansion plans to continue to build out their chemical conversion plants which, of course, are domiciled in China, and how they would not be doing that expansion if they did not have confidence around the outlook,” he said.
“So we see strong pricing support in the near term, but of course, watch with interest as we look at some of the COVID lockdowns and the other unrest that we’re starting to get some observations into in China.
“As I say, we’ve not we’ve not seen any cause for concern – at least not yet.”
Earlier this month, Fastmarkets analyst Peter Hannah said there were subcycles within any supercycle.
“Fastmarkets analysts are projecting the slightest of surpluses next year but note that restocking appetite after an extended period of hand-to-mouth survival may see this well-absorbed, limiting potential price downside,” he said.
Henderson pointed to the “yawning” lithium supply gap, with Benchmark Mineral Intelligence forecasting that 18 of Pilbara’s Pilgangoora mines would be needed by 2040 to bridge the gap.
He said the 4-5 years it took Pilgangoora to get into production was “breakneck speed”.
“Think about that just for one of these assets. Think about bringing 18 to life.
“So the world needs a lot more lithium and the takeaway for Pilbara is as tough as it was to be early to the market, it’s created this incredible opportunity for our business which we’re set to enjoy for many years to come.”
The ASX 100 producer has had a big year, capped off by an “incredible” September quarter.
“In fact, we’re looking to move into the ASX 50,” Henderson said.
“Life is going very, very well for Pilbara.”
The company’s expansion to 680,000 tonnes per annum is “deep into construction” and an expansion to 1 million tonnes per annum is set for a final investment decision within weeks.
“We’ll look to get that tucked away as a Christmas present,” Henderson said.
Earlier this month, Pilbara received a 10-year, A$250 million loan from the Australian government to support its expansion plans.
Henderson said it was a strong endorsement of Pilbara as it looked to move offshore.
“We think that sends a really strong message to the market about our critical minerals project,” he said.
Pilbara’s first offshore move is a joint venture with POSCO over a 43,000tpa lithium hydroxide plant in South Korea.
The JV includes an option for Pilbara to acquire an additional 12% in the project to take its stake to 30%.
Henderson and Pilbara chairman Tony Kiernan recently visited the site and were impressed by the progress.
“[POSCO] have a burning focus to have construction complete by October next year,” Henderson said.
“It will be fantastic to have a hydroxide plant on the doorstep of the players who matter.”
Pilbara shares rose 4.1% this morning to $4.60, giving the company a market capitalisation of $13.8 billion.
