Pilbara Minerals Share Price Down 6.38% after Troublesome Results

The Pilbara Minerals Ltd [ASX:PLS] share price has fallen dramatically by nearly 7% in morning trading, after the company’s update report revealed negative projections for both production and sales.

Upon this fall, Pilbara Minerals was one of the worst performers on the All Ordinaries index today.

At time of writing, its share price is sitting at $0.66AUD.

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What was in the update?

The update was regarding production and sales at the lithium miner’s Pilgangoora Lithium-Tantalum Project in Western Australia.

Though in terms of production there was a growth trend, some analysts are speculating this won’t last. The spodumene concentrator is due for a six-day shutdown soon. There’ll also be another shutdown in July, for two weeks.

The purpose of these shutdowns is to give the company time to further plant improvement works and rectify defects.

The sales update isn’t much more exciting, with news that delays in construction, commissioning and building out of its offtake customer chemical conversion capacity in China has negatively affected June quarter sales.

This is most likely what sent investors running today.

It’s worth noting, however, that the underlying demand for battery-ready lithium chemicals is still strong.

But the delays in the plant’s operations have resulted in lower shipped tonnes during the June quarter.

Also, the company has reported that spodumene concentrate pricing has continued to soften.

This doesn’t exactly spell out happy times ahead for the lithium miner’s struggling share price.

Lithium miners in strife

It’s not only Pilbara Minerals who are in trouble. News of dwindling prices has also weighed heavily on other lithium miners today, including Galaxy Resources Ltd [ASX:GXY] and Orocobre Ltd [ASX:ORE], whose share prices have fallen 4% and 3.5% respectively, at time of writing.

It’s clear that lithium’s going through a tough spot, but that doesn’t mean it will last.

You may want to hold on or ship out…

But be sure to remember the underlying demand for lithium, and consider its potential growth over the next decade before making hard and fast decisions.


Ryan Dinse

For Money Morning

PS: We still believe in lithium, and the enormous potential it offers. But you’ve got to understand it to benefit from it. For a deeper dive into the ‘lithium frenzy’ right now, check out this free report on the ‘Battery Boom’. Download here.

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

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