Greenbushes to miss whilst PLS may beat onhigher shipments; MIN...

Greenbushes to miss whilst PLS may beat onhigher shipments; MIN inline
We review our June 2024 half year financial estimates against consensus average fromVisible Alpha (VA).⇒ PLS: Our headline financials for 2HFY24 are mixed with Ebitda and Underlying earning24% higher and 6% lower respectively. Our capital expenditure estimates of A$518mare within 2% of consensus averages. Our net cash forecast of A$1.25b is in line withVA consensus of A$1.24b. We note PLS continue to boast a strong balance sheet, thestrongest amongst the lithium producers

Pilbara Minerals (PLS)• We expect total material mined at PLS to be 8.1mt, 15% lower QoQ reflecting lower oreand waste mined. Decreased mining rates are offset by higher processing rates, resultingin spodumene production of 193kt in 3QFY24e, 10% higher sequentially. Year to dateproduction of 307kt represents 76% of PLS FY24 production guidance (mid point of660-690kt). We expect shipments to be greater than production with an export of 194kt,22% higher than the prior quarter, with inventory drawdown.• We anticipate an average grade of ~5.3% for spodumene produced in the March quarter,similar to prior quarters. We have forecast average realised prices of US$893/dmt atSC5.3% (US$1,010/t at SC6%), which is >20% lower than the 2QFY24 prices, reflectinglower lithium prices over the last three months. We note the realised prices would besensitive to timing of shipments.• We note PLS expanded its offtake agreements with Ganfeng in January and with Chengxinin February 2024. In March, the company also executed a new off-take with Yanhualithium in March, which included a total supply of 220-400kt spodumene concentrateover a three-year period. The new off-take arrangements indicate increased marketappetite for lithium raw materials as lithium prices appear to approach a floor at ~US$900/t in the March quarter.• Versus consensus, we expect an 8% beat in spodumene shipments offset by a 10% miss inunit operating costs.