Pilbara Minerals (ASX:PLS) share price is sinking, still up 140% this year

Shares in the lithium player are on the down today, but zooming out shows a different picture.

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The Pilbara Minerals Ltd (ASX: PLS) share price has dipped 7.24% into the red during trade on Friday. The dip comes on the back of a 37% gain over the last month.

In fact, whereas the S&P/ASX 200 Index (ASX: XJO) has climbed around 14% since 1 January, the Pilbara Minerals share price has climbed 136% this year to date.

Let's go over the tailwinds that have propped up Pilbara shares this year.

A man scratches his head in confusion.

Image source: Getty Images

The year so far for Pilbara Minerals

The Pilbara Minerals share price came into the year with a large run-up on the charts from October 2020 to 21 January 2021.

Pilbara shares ran into volatility early in the year after the company reported its half-year results on 19 February.

The company had grown revenue 56.5% year over year, underscored by a huge uplift in spodumene concentrate shipments.

However, Pilbara didn't recognise this huge lift directly in its revenue due to pricing weakness "that remained weak during the half year… across the entire supply chain".

Consequently, the company posted a loss of $21.2 million for the half.

Following on from this, Pilbara launched its digital sales platform in March, which sent its shares walking into the green.

The Battery Material Exchange (BMX) is designed to sell Pilbara's unallocated spodumene concentrate inventory. The company forecasts an additional sales benefit from the launch of this platform.

What about from May onwards?

Although these progress points add to Pilbara's growth narrative, it was from May where its shareholders have enjoyed the most gains.

It was in May when the company detailed a series of price-sensitive announcements that momentum started.

To illustrate, the Pilbara share price soared on "exceptional drilling results" at its Pilgangoora Lithium-Tantalum project in Western Australia on 10 May.

Next, it announced a joint venture with Calix Ltd (ASX: CXL) to develop a midstream lithium chemicals refinery. The pair are running a scoping study that is due to finish later this year.

Moreover, how could we forget the net effect of such hot running lithium markets. Lithium spot prices made their run from "multi-year lows to multi-year highs" this year, despite drawdown periods.

As a result, Lithium spot prices have propped both ASX-listed lithium miners and explorers this year to date. Pilbara is no exception.

In addition, July was busy for Pilbara, where it reported record spodumene concentrate shipments in its fourth-quarter update.

It also recognised better pricing versus the previous quarter, which all came through to record spodumene concentrate sales of 109,190 dmt. And the Ngungaju Plant was approved to restart around the beginning of July.

Consequently, the Pilbara Minerals share price has rallied from $1.455 to $2.05 today, a 41% climb.

Finally, the company gave results its inaugural BMX auction in July, which saw Pilbara shares gain 8% on the day as its share price recommenced trading.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price has posted a return of 567% over the past 12 months. This outpaces the broad index's return of around 25% over the last year.

In addition, Pilbara shares have dipped into the red over the past week, sliding around 14%.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

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