Ann: Results of Third BMX Auction, page-62

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max21

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27/10/21

09:20

Post #: 57100533
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Originally posted by bakker: ↑

Summary from a broker house …seems that some are never fully satisfied.

Pilbara Minerals (PLS AU)Third spot sale completedKey points PLS has completed its third spot sale of a 10kdmt cargo of 5.5% lithia spodumene concentrate at a price of US$2,350/dmt.
The 5% higher price than the previous sale is equivalent to a Benchmark CFR China price of US$2,629/dmt and was lower than we expected.
Spot sales continue to generate higher prices, but we note that the 5% rise lagged the ~30% lift in Chinese lithium prices over the same period.
Event• PLS has completed the third sale on its Battery Material Exchange (DMX) platform.Impact• Third spot sale completed: PLS has undertaken the third auction on its BMX platform for a cargo of 10kdmt of 5.5% lithia grade spodumene concentrate for delivery in February 2022. A total of 25 bids were received with PLS accepting the highest bid of US$2,350/dmt.•
Realised price materially higher than our forecast:
The realised price rose 5% from the second auction completed in mid-September and translated to an equivalent benchmark 6.0% lithia grade spodumene concentrate price of US$2,629/dmt. The price is 64% higher than our forecast peak price of US$1,600/dmt for the 4QFY22 and 100-140% higher than our average price forecasts for the next three years.•
Price increase lagged spot price move:

The 5% rise in the spot sale realised price compared to the last sale in mid-September has lagged the move in Chinese domestic lithium prices. Over the same period, spot prices in China are up 32% for battery grade lithium carbonate and 30% for lithium hydroxide.

Earnings and target price revision• No change

Price catalyst• 12-month price target: A$2.80 based on a 50/50 Blend of 12.0x forward EV/Ebitda and NPV methodology.

• Catalyst: PLS is set to release its 1QFY22 production result on 28 October with guidance on forward realised pricing a key potential catalyst for the stock.
Action and recommendation• Maintain Outperform: The third spot sale has seen the positive price momentum continue for PLS, although the 5% rise was lower than we expected and lagged the ~30% move in Chinese domestic lithium carbonate and hydroxide prices over the same period. That said the realised price is over 100% higher than our forecast spodumene prices for PLS over the FY22-FY24 period, suggesting to us there remains considerable upside risk to our forecasts for PLS.

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The broker house is trying to down play the significance of the announcement then. There is no way I would use that broker house.

A friend of mine said his broker said that the Lithium peak has finished. He said, what did you say, it has only just begun.

We have to realize that they are brokers because they can’t make money for themselves, otherwise they would be doing what we are doing.

PLS Price at posting: $2.26 Sentiment: Hold Disclosure: Held
12 Upvote

4 Great analysis

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(20min delay)
Last $3.00		Change 0.050(1.69%)		Mkt cap ! $9.034B

Open	High	Low	Value	Volume
$2.92	$3.04	$2.92	$45.62M	15.23M

Buyers (Bids)

No.	Vol.	Price($)
6	345887	$2.99

Sellers (Offers)

Price($)	Vol.	No.
$3.01	35013	5

View Market Depth

No.	Vol.	Price($)
6	345887	2.990
2	91758	2.980
3	8450	2.970
4	68000	2.960
5	22203	2.950

Price($)	Vol.	No.
3.010	35013	5
3.020	187590	13
3.030	672841	14
3.040	137288	21
3.050	781122	46

Last trade - 16.10pm 05/11/2024 (20 minute delay)

PLS (ASX) Chart

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Ann: Results of Third BMX Auction, page-62

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