Is the lithium supply squeeze already here?

Pilbara Minerals (ASX:PLS) went to an all time high and other lithium stocks caught some of the tailwinds off the back of its second Battery Material Exchange auction yesterday.

The company sold an 8000t batch of 5.5% spodumene concentrate – not even what battery makers would call the good stuff – for US$2240/t, the equivalent of selling benchmark 6% product at US$2500/t.

That’s a cool US$17.92 million haul (or $24.46 million Australian).

It’s around six times what Pilbara was being paid for spod from the Pilgangoora mine a year ago, and blew S&P Global Platts’ September 10 reference price of US$1400/t out of the water.

MD Ken Brinsden made a big deal about price discovery at his Diggers and Dealers presentation last month, having sold its last batch on the online platform at US$1250/t.

The company is now promising to release more product to the market via the platform … because why wouldn’t you?

Pilbara shares rose almost 9% to a record $2.47 as of 3.10AEST today to lead the ASX’s large cap mining stocks.

Liontown Resources (ASX:LTR) rose again by 6.1% to record highs of $1.565, while Orocobre (ASX:ORE) was more muted with a 1.88% gain.

PLS, LTR, ORE share price charts


Big miners drop

On the flip side the big miners BHP (ASX:BHP), Rio Tinto (ASX:RIO), FMG (ASX:FMG) and Mineral Resources (ASX:MIN) were all in the red today as iron ore prices dropped again to around US$120/t, their lowest level in 10 months or so.

Weak Chinese economic data and steel production cuts in China, which consumes around 80% of Australia’s iron ore, have been blamed for the 40-odd per cent fall in prices since records of US$233/t were hit in May.

“Iron ore prices fell to $US120/t yesterday on weak restocking demand in China,” Commbank analyst Vivek Dhar said.

“Uncertainty around steel production cuts as well as expectations for iron ore prices to drift lower kept steel mills away from the market, despite iron ore inventories at mills being reportedly low.”

The ASX 200 Materials index was down 1.35% at 3.10AEST.

BHP, RIO, MIN, FMG share price charts



Silver Lake Resources has been a mid-tier gold miner for a fair while now, but has always been a bit behind some of its peers when it comes to mine life visibility.

It sent a stronger signal to investors today with a three year outlook for its Mt Monger and Deflector gold mining hubs, which will see it attempt to ramp up production from 235,000-255,000oz in FY22 to 255,000-275,000oz in each of FY23 and FY24.

That has been underpinned by exploration success and the addition of the Rothday gold mine, with group ore reserves up 18% in absolute terms and 61% net of mine depletion to 1.36 million ounces gold and 5,300 tonnes copper.

Group mineral resources are also up 8% net and 2% in absolute terms to 5.41Moz gold and 23,000t copper.

Silver Lake says it will put another $25 million into drilling out its pipeline of advanced exploration projects this financial year.

Silver Lake Resources share price today: