Why the Pilbara Minerals (ASX:PLS) share price is surging 7% today

Pilbara Minerals and the broader ASX lithium sector is on the rise …
The post Why the Pilbara Minerals (ASX:PLS) share price is surging 7% today appeared first on The Motley Fool Australia. –

The Pilbara Minerals Ltd (ASX: PLS) share price is bouncing higher on Monday, up 6.28% to $2.20.

The past two weeks have proved a volatile period for the lithium sector, with most ASX-listed lithium shares experiencing a 10-20% drawdown.

That said, the Pilbara Minerals share price is still up 152% year-to-date, down from a peak year-to-date performance of 181% on 11 August.

What’s driving the Pilbara Minerals share price on Monday?

Broad based buying across the ASX lithium sector

ASX lithium shares are rallying across the board on Monday.

Established producers including Orocobre Limited (ASX: ORE), Mineral Resources Ltd (ASX: MIN) and IGO Ltd (ASX: IGO) are up 5.42%, 2.41% and 3.80% respectively.

Prospective explorers such as Liontown Resources Ltd (ASX: LTR), Lake Resources NL (ASX: LKE) and Charger Metals NL (ASX: CHR) are also catching bids, rallying a respective 5.88%, 14.55% and 5.35%.

The broad-based buying for lithium shares is likely a key driver for the rebound in Pilbara Minerals shares on Monday.

Lithium ETF rebounds last Friday

The Global X Lithium & Battery Tech Exchange Traded Fund (ETF) is another useful gauge for how the lithium market is performing. The ETF, which is listed on the US market, rallied 1.97% higher on Friday, within 2.5% of all-time highs.

The lithium ETF invests in the full lithium cycle, from mining and refining the metal, to battery production and automakers.

The ETF performance reflects a similar narrative as the Pilbara Minerals share price, bouncing off recent lows and within an arm’s reach of all-time highs.

Pilbara Minerals FY21 results

The Pilbara Minerals share price tumbled 4.11% on Thursday, 26 August after the company released its FY21 results.

The company delivered pleasing top-line growth with lithium shipments up 142% to 281,440 dry metric tonnes (dmt) driving a 108.9% revenue increase to $175.8 million.

Despite the significant operational improvement and jump in sales, Pilbara Minerals reported an FY21 net loss of $51 million.

Looking ahead, Pilbara Minerals forecasts FY22 production between 460-510,000 dmt and shipments between 440-490,000 dmt.

The company expects costs to be higher in FY22-23 due to elevated strip ratios, production ramp-up and the restart of its Ngungaju operation.

The post Why the Pilbara Minerals (ASX:PLS) share price is surging 7% today appeared first on The Motley Fool Australia.

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More reading

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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.

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