The Orocobre (ASX:ORE) share price hits record high today. Here’s why

Orocobre and the lithium sector are rocketing today. Here’s what you need to know.
The post The Orocobre (ASX:ORE) share price hits record high today. Here’s why appeared first on The Motley Fool Australia. –

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.

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.

The post The Orocobre (ASX:ORE) share price hits record high today. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Orocobre right now?

Before you consider Orocobre, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Orocobre wasn’t one of them.

The online investing service he’s run for nearly 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 are better buys.

*Returns as of May 24th 2021

More reading

ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher

Guess which sector this week’s top performing ASX 200 shares all come from

The Orocobre (ASX:ORE) share price hit an all-time high today
Why BlueBet, Orocobre, Praemium, & Sandfire shares are racing higher

ASX 200 midday update: Afterpay & Zip sink, Orocobre rises on broker upgrade

Motley Fool contributor Kerry Sun has no position 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!