Has the lithium price reached its floor?

Supply is finally starting to decline as higher cost producers exit the market, says Pilbara Minerals CEO.

| More on:
A strong female rock climber holds on to a precarious cliff face by her fingernails.

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

Pilbara Minerals Ltd (ASX: PLS) CEO Dale Henderson says the lithium price may have reached a floor, given signs of falling supply in what has been an oversupplied market for some time.

Upon releasing the company's fourth quarter update, Henderson commented that crumbling lithium prices had prompted higher-cost suppliers to exit the lithium market. He added (courtesy Australian Financial Review):

It looks like high-cost supply is coming out of the market, so no surprise there.

And it looks like the bulk of the supply is reducing to those major producers with a low-cost profile, such as Pilbara.

Henderson added that it was "likely to be more difficult" for new lithium projects to find funding while commodity values remained as low as they are today.

This will help tighten supply and demand and benefit producers still operating today.

Pilbara Minerals reported a 4% increase in its average realised selling price for the fourth quarter to US$840 per dry metric tonne (dmt). Its average unit operating cost fell 7% to US$483 per dmt.

The full-year numbers aren't so pretty.

Spiralling lithium prices led to Pilbara's average full-year realised price crashing by 74% from US$4,447 per tonne in FY23 to $1,176 per tonne in FY24.

Are we there yet with lithium prices?

Unfortunately, top broker Goldman Sachs thinks there is further price pain to go with lithium values.

My colleague James reported Goldman's latest price predictions for 2024 through til 2027 as follows:

Spodumene 6% lithium price

  • 2024: US$995 per tonne
  • 2025: US$800 per tonne
  • 2026: US$978 per tonne
  • 2027: US$1,155 per tonne

Lithium carbonate price – China

  • 2024: US$11,683 per tonne
  • 2025: US$11,000 per tonne
  • 2026: US$13,323 per tonne
  • 2027: US$15,646 per tonne

Lithium hydroxide price – China

  • 2024: US$11,463 per tonne
  • 2025: US$12,500 per tonne
  • 2026: US$14,323 per tonne
  • 2027: US$16,146 per tonne

Pilbara Minerals share price snapshot

The Pilbara Minerals share price took a tumble in FY24 as lithium prices continued their decline.

Pilbara Minerals shares fell 37.22% over FY24 to finish the year at $3.07 per share on 28 June.

Today, the Pilbara Minerals share price is $2.86, down 1.21%.

Goldman Sachs has reiterated its sell rating on Pilbara Minerals shares. Following yesterday's quarterly report, the broker has also cut its 12-month price target from $2.60 to $2.40 per share.

Created with Highcharts 11.4.3Pilbara Minerals PriceZoom1M3M6MYTD1Y5Y10YALL1 Jul 202320 May 2025Zoom ▾Jul '23Oct '23Jan '24Apr '24Jul '24Oct '24Jan '25Apr '25Jul '23Jul '23Jan '24Jan '24Jul '24Jul '24Jan '25Jan '25www.fool.com.au

Here's how other ASX lithium shares are tracking today:

  • Core Lithium Ltd (ASX: CXO) shares are 9.2 cents, down 2.13%
  • Mineral Resources Ltd (ASX: MIN) shares are $51.94, down 1.38%
  • Liontown Resources Ltd (ASX: LTR) shares are 95 cents, down 2.07%
  • Arcadium Lithium CDI Def (ASX: LTM) shares are $5.03, down 1.57%.

In a recent article, my colleague Bernd pondered: How risky is buying ASX lithium shares right now?

Should you invest $1,000 in Core Lithium Ltd right now?

Before you buy Core Lithium Ltd 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 Core Lithium Ltd 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 Bronwyn Allen has positions in Core Lithium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Materials Shares

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Materials Shares

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Materials Shares

Why did the Liontown share price rip 19% higher today?

This ASX lithium share was the fastest riser of the ASX 200 today.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »