While acknowledging the absolute confusing week investors have been put through, new PLS MD and CEO Dale Henderson shared his macro-observations as a key participant in the supply chain.

“The recent argument is that lithium supply is coming in spades from Africa – we would caution that, and the other argument is that it is coming from lithium lepidolite… we would caution that too,” he said.

“Lepidolite is not straightforward to process and if it was easy, it would have happened by now. I also would have expected some of the big lithium chemical producers to have bought assets there, which hasn’t happened, so I caution that.”

In terms of the long-range horizon for lithium supply and demand, Henderson said this is the establishment of a new industry.

“If I think back to 2017, when I first started with Pilbara, the sky was bright, lithium was the new oil and within seven months we commenced the downhill side, which was two years of survival contraction.

“Fast forward to 2020 and it is a completely different story – by this point Europe launched out the blocks and really got going with EV subsidies, production and so on and so forth, then North America kicked into gear particularly with the Biden administration coming in.

“I reference that short, history over the past five years to highlight this massive shift in the demand side of the equation and no one is questioning that.

“There seems to be strong agreement that lithium is that key ingredient of choice for battery chemistries going forward.”

But it is the short-term horizon, he says, that is looking particularly “very, very strong.”

“We are inundated with enquiries and the most meaningful example is our latest materials exchange auction,” he said.

Towards the end of May, the company pulled in US$5955/t for a shipment of 5.5% Li2O concentrate, destined for the Asian battery market.

That offer masks the true value of the sale given standard contract and spot pricing is conducted on a 6% Li2O basis. And on that measure, PLS is getting paid the equivalent of US$6,586/t for the 5000dmt cargo.

“What’s more, the phone kept ringing – there was a clamouring in the auctions to secure that tonnage and there were others following up saying ‘how can we get some, can we match that price’.

“That was as little as 15 days ago, so you be the judge about the current market and the appetite we have here.”