The Orocobre Ltd (ASX: ORE) share price has touched a new record high on Thursday after the company announced its June quarterly results.
At the time of writing, the Orocobre share price is rocketing 11% higher to fresh new territory at $7.73.
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Orocobre share price surges after upbeat results
Investors are bidding up the Orocobre share price this morning after the company delivered a solid set of results, validating the narrative of an improving lithium market.
In the June quarter, Orocobre produced 3,330 tonnes with 66% of production being battery grade lithium carbonate. This figure represents a 31% increase on the prior corresponding period (pcp) and a 2% increase on the previous quarter.
Orocobre reported sales volume of 2,549 tonnes, up 59% on pcp but down 16% on a quarter-on-quarter (QoQ) basis. The company said this was due to global shipping delays and "the requirement to hold additional stock in Japan to guarantee smooth delivery into the Prime Planet Energy and Solutions (PPES) contract".
Lithium prices continued to improve during the quarter, with sales revenue of US$21.6 million, up 22% QoQ.
The company cited that average realised price was up 45% QoQ to US$8,476/tonnes free on board (FOB), which excludes insurance and freight charges.
Encouragingly, Orocobre highlighted that prices have now increased by nearly 170% over the last nine months.
From a cost perspective, cash costs edged 5% higher to US$4,105/tonne on pcp.
Looking ahead, Orocobre said it would allocate a proportion of sales in the upcoming half into contracts that were agreed in December 2020.
Orocobre forecast the average price for its lithium carbonate would reflect improved market conditions, but would be partially offset by laggard pricing from December 2020 contracts.
The company expects the overall price for the December half to be approximately US$9,000/tonne FOB, subject to shipping and delivery schedules.
Orocobre growth plans
Orocobre plans to meet surging lithium demand through the stage 2 expansion of its Olaroz lithium facility.
In today's announcement, the company said stage 2 was expected to be complete in the first half of CY22 with production to follow in the second half.
By the second half of CY24, it anticipates production to reach full capacity of 25,000 tonnes per annum of primary grade lithium carbonate.
Looking even further ahead, the company is undergoing a scoping study into a stage 3 expansion at Olaroz.
Orocobre also hinted at discussions with Toyota Tsusho Corporation about "an expansion of lithium hydroxide production to meet forecast growth in demand".
About the Orocobre share price
2021 has been a stellar year for the lithium sector, with the Orocobre share price surging 65% year-to-date.
The Orocobre share price has today surpassed its 2018 highs of $7.45, reached before the lithium market crashed due to oversupply.
