The Pilbara Minerals Ltd (ASX: PLS) share price jumped 7% today after the ASX lithium share released its March 2023 quarterly update.
Pilbara Minerals is one of the largest lithium miners on the ASX and told investors last night, after the market had shut, about its performance for the three months to 31 March 2023.
March 2023 quarter update
Pilbara Minerals said that its production of 148,131 dry metric tonnes (dmt) of spodumene concentrate (lithium ore material) fell 9% quarter on quarter.
Its shipments of 144,312 dmt of spodumene concentrate dropped 3% quarter on quarter.
A key factor for investors to know about is the sales price of the production that it’s selling. The average estimated realised spodumene concentrate sales price was around US$4,840 per dmt. That’s a decline of 15% quarter on quarter, a major negative.
The cost to mine each dmt increased by 9% quarter on quarter to A$632, which is also a negative.
However, the company’s cash balance increased by a further $457 million to finish the quarter at $2.68 billion.
There were a couple of positives for shareholders during the quarter, including the payment of the first dividend of $0.11 per share, fully franked, after it made $1.24 billion of net profit.
It also made a final investment decision to increase the production capacity potential of the Pilgangoora project to around 1 million tonnes per year of spodumene concentrate.
Price expectations
In the quarter, its production was shipped through both existing offtake agreements and through a (on the) spot sale of 15,000 dmt based on a new pricing model linked to tolling lithium hydroxide.
Prices for lithium continued to soften over the quarter. But, the company is expecting that spodumene prices will continue to soften in the June 2023 quarter until pricing for lithium chemicals stabilises, including domestic pricing in China.
However, prices could potentially improve in the second half of 2023 as restocking of inventory levels in China occurs across the supply chain.
Final thoughts on the Pilbara Minerals share price
The ASX lithium share has seen a lot of ups and downs this year already. I think it has a very attractive future, as long as lithium remains the key commodity for batteries. The business has a huge cash pile and it’s very promising what will happen in the future as it builds out its projects.
Under $4 would be a more attractive price, but who knows where the Pilbara Minerals share price is headed over the rest of the year?
