Pilbara Minerals hits fresh highs as market upgrades lithium price outlook

Shares in Pilbara Minerals are continuing their run higher into uncharted territory as the lithium miner rides market optimism about the future outlook for the battery metal (reports The West Australian).

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The Dale Henderson-led miner was up almost 5 per cent to $4.77, setting a new fresh high. The stock has now rallied more than 30 per cent since starting the month at $3.62.

Spodumene prices have more than doubled since the start of the year to nearly $US5000 a tonne with Pilbara’s frequent online auction of spot cargoes attracting bids equivalent to a price of more than $US7000/t.

Sydney-based financial services firm Barrenjoey on Monday became the latest market commentator to significantly upgrade its price forecast for lithium with expectations the market will remain tight until 2024.

In a research note, the company’s head of mining research Glynn Lawcock noted electric vehicle sales globally continued to outpace combustion vehicle sales, up 117 per cent year-to-date in China and 32 per cent in Europe.

“In our view, the key limiting factor to greater adoption remains the development of raw materials, particularly lithium,” he said.

“We think the market expects a surge in supply in 2023 which we would expect to be more tilted towards year-end and into 2024.”

Barrenjoey upgraded its price forecast for spodumene by a massive 86 per cent for 2023 to $US6500/t and 52 per cent to $US4030/t in 2024.

“Downstream we now forecast lithium carbonate and hydroxide prices of $US63,000/t for 2023 and $US45,000/t for 2024, upgrades of 57 per cent and 36 per cent respectively,” Dr Lawcock said.

“We expect supply tightness to ease from the current extreme levels of supply anxiety towards a more balanced market by 2026.

“Our long-term prices for spodumene of $US1100/t and lithium hydroxide of $US15,000/t are unchanged.”

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