Pilbara Minerals said on Thursday it saw signs the lithium market was stabilizing as Australia’s top producers reported a slump in earnings and took steps to ride out slowing demand for the raw material of electric vehicle batteries.
Lithium prices have fallen around 70% over the past year as EV sales growth slowed, but capacity expansions by chemicals makers and government support globally bode well for the market longer term, Pilbara Minerals CEO Dale Henderson said.
In the short term, prices of lithium ore spodumene appear to have levelled out, with a small increase in China’s lithium carbonate prices and more customer enquiries over the last eight weeks than in “quite some period”, Henderson told an earnings call.
Top battery maker CATL’s closure of its high cost Jianxiawo lepidolite operations would be a positive sign for the market, he said. Australian lithium stocks gained early this week after Reuters reported speculation about the closure.
“If it is to be true, it signals effectively a swing price… that knocks out lepidolite supply…If there were ever a group that could keep a mine running it would be CATL,” Henderson said. Lepidolite is a lithium mineral that is costly to process.
Pilbara reported a 78% plunge in first-half profits on weak lithium prices and withheld dividends to preserve capital for project investments.
Other major producers in Australia, which supplies around half the world’s sea-borne lithium, doubled down on cost cuts and said they would review the timing of new investments pending market conditions.
Diversified miner Mineral Resources said it may curtail the timing of first production from its Wodgina train 3 concentrator which was due mid year. The build out of a fourth train, still slated for 2026, could be delayed, according to Citi analysts.
“On pricing, MIN thinks it’s close to the bottom here and price will come back after CNY,” said Citi in a note. Mineral Resources reported underlying earnings of A$649 million, down 28% on the same half a year earlier.
Battery minerals producer IGO lodged a 26% profit drop and said timing of a fourth ore processing plant at its Greenbushes mine may be adjusted. It is due to start commissioning in 2027.
IGO owns Greenbushes, which is the world’s largest lithium mine with China’s Tianqi Lithium and Albemarle Corp.
