General Discussion Topics, page-64201

From PLS quarterly results:

Bumper quarterly production and pricing delivers strong operating cashflow.

Average spodumene concentrate reference sales price of US$4,267/dmt1 a 61% increase Quarter on Quarter (SC 6.02, CIF China basis) (March 2022 Quarter: US$2,650/dmt CIF China SC6.0 basis)

Strong pricing achieved from both Battery Material Exchange (BMX) sale auctions undertaken during the Quarter. Realised price of US$5,955/dmt received for product sold in the May 2022 auction (SC5.5, FOB Port Hedland basis), with a price of US$6,350/dmt (SC5.5, FOB Port Hedland basis) then received from a subsequent pre-auction sale in June 2022.

Market demand for battery raw materials remained strong, with Chinese lithium prices stabilising close to all-time highs.

Current market dynamics suggest that favourable pricing for spodumene concentrate will continue during the September 2022 Quarter.

2. Market Commentary
Market demand for battery raw materials remained exceptionally strong throughout the Quarter. Pilbara Minerals received a sales price equivalent to over US$7,000/dmt (SC6.0 CIF China4) for a cargo sold in late June 2022, as well as multiple approaches from new customers seeking product.
Following the sharp spike in prices seen during the March 2022 Quarter, Chinese lithium prices stabilised in the June Quarter. This was due to a combination of factors including China’s lockdown measures following a surge in COVID-19 cases and a slowdown in demand from the EV sector.
In recent weeks prices have stabilised at near all-time high levels, with lithium carbonate trading at ~US$70,000/t and lithium hydroxide at ~US$71,000/t.

The continued strong demand outlook for lithium raw materials, particularly for the EV sector, was evident during the Quarter with China reporting increase in EV sales to 546,000 units in the month of June, which accounted for nearly 30% of total vehicle sales. Sales for market leader BYD Co Ltd more than tripled to 134,000 units. In addition, Tesla was reported as having sold around 78,000 China-made vehicles in June 2022 which is up 142% from the May sales of 32,165 China-made vehicles, and up 135% from a year ago. Future demand for battery raw materials for EV’s appears to be gathering pace with Ford Motor Company recently announcing various deals with mining companies to help boost its annual global EV production rate to 600,000 units by late 2023 and to more than two million units by the end of 2026. Earlier this year, the US-based automobile manufacturer increased its planned EVs investment from its prior target of US$30bn to US$50bn through 2026.

The strong prices received for both cargos provide further evidence of the robust demand for lithium raw materials currently being experienced across the global lithium-ion supply chain.