Here's why the Pilbara Minerals (ASX:PLS) share price is tumbling lower

The Pilbara Minerals Ltd (ASX:PLS) share price is under pressure on Wednesday after releasing its third quarter update…

| More on:
a trader on the stock exchange holds his head in his hands, indicating a share price drop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Pilbara Minerals Ltd (ASX: PLS) share price has come under pressure on Wednesday.

In afternoon trade, the lithium producer's shares are down 4% to $1.25.

Why is the Pilbara Minerals share price under pressure?

Investors have been selling Pilbara Minerals shares today despite the release of a strong third quarter update.

According to the release, the company achieved record production of 77,820 dry metric tonnes (dmt) of spodumene concentrate during the three months ended 31 March. This is up 22% from its second quarter production of 63,712 dmt.

Positively, during the latter two months of the quarter, the company was operating with annualised production capacity of approximately 330,000 tonnes per annum of dry spodumene concentrate. This equates to quarterly production of 82,500 dmt.

Why are its shares falling then?

Taking some of the shine off the quarter, and possibly the reason for the weakness in the Pilbara Minerals share price today, was its shipping update.

During the quarter, the company achieved spodumene concentrate shipments of 71,229 dmt. This was broadly flat on the prior quarter's shipments of 70,609 dmt.

Management advised that its final March shipment was only partially completed as a result of port delays beyond its control.

Lithium prices continue to rise

Another positive from the report was that lithium chemicals pricing continued to significantly improve during the quarter. Furthermore, this is now starting to be reflected in the price received for spodumene concentrate sales.

Management notes that at the end of March it received a letter of credit ahead of an April 2021 spot sale of spodumene concentrate. This order implies a headline price of US$655/dmt, which it feels highlights the recent strong upward trajectory in pricing.

This compares very favourably to its unit cash operating cost of US$383/dmt that was achieved during the quarter. It is also a big increase on the average selling price of approximately US$410/dmt during the third quarter.

Even better, though, is that management continues to target a unit cash operating cost of US$320-350/dmt. This is based on an AUD:USD exchange rate of 0.72 and its processing plant operating at steady-state production.

If it achieves this and prices remain strong, the company will be generating significant free cash flows. This could be a big positive for the Pilbara Minerals share price in the coming quarters.

Should you invest $1,000 in Kogan.com Limited right now?

Before you buy Kogan.com Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Kogan.com Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why HMC Capital, Platinum, Sigma, and Skycity shares are dropping today

These shares are having a tough session on Tuesday. But why?

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

ASX 200 energy shares plunge on shock OPEC move

ASX 200 energy shares like Woodside and Santos are tumbling on Monday. Let’s find out why.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Brainchip, Helia Group, Reliance Worldwide, and Westpac shares are dropping today

These shares are starting the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Corporate Travel Management, Judo, and Zip shares are sinking today

These shares are missing out on the good times on Friday. But why?

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Share Fallers

These were the worst-performing ASX 200 shares in April

These shares were out of form last month. But why?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

Corporate Travel shares crash 11% as Trump tariffs bite

Trump’s tariffs are roiling Corporate Travel shares on Friday.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Brainchip, DroneShield, Resolute Mining, and Woodside shares are falling today

These shares are under pressure on Thursday. What's going on?

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Share Fallers

Why Appen, Bank of Queensland, Novonix, and Ora Banda shares are falling today

These shares are having a tough time on hump day. But why?

Read more »