What could be sending the Pilbara Minerals share price 7% lower today?

A man holds his head in his hands, despairing at the bad result he's reading on his computer.

A man holds his head in his hands, despairing at the bad result he's reading on his computer.

The Pilbara Minerals Ltd (ASX: PLS) share price is having a disappointing finish to the week.

In afternoon trade, the lithium miner’s shares are down 6% to $4.48.

At one stage, the Pilbara Minerals share price was down as much as 7.5% to $4.42.

What’s going on with the Pilbara Minerals share price?

Investors have been hitting the sell button in the lithium industry on Friday, leading to a number of high flying lithium shares recording sizeable declines.

Here’s a summary of some of the movers and shakers:

  • The Allkem Ltd (ASX: AKE) share price is down 7%
  • The Core Lithium Ltd (ASX: CXO) share price is down 5%
  • The Lake Resources N.L. (ASX: LKE) share price is down 4.5%
  • The Liontown Resources Ltd (ASX: LTR) share price is down 5%
  • The Mineral Resources Limited (ASX: MIN) share price is down 4%

This appears to have been driven by concerns about lithium prices amid recent bearish calls from both Credit Suisse and Goldman Sachs. With high prices baked into lithium share valuations, any risk that they fall short of expectations is always likely to cause alarm.

Though, it is worth remembering that forecasting commodity prices is notoriously difficult.

What else?

In addition, with COVID cases soaring in China, there are fears that lockdowns could return and economic growth could suffer.

Given that China is a huge consumer of lithium, this could lessen demand and put downward pressure on the sky high prices the white metal is commanding.

Though, it may not be too long until investors will be able to see if that is the case. Last month, Pilbara Minerals held two online lithium auctions via its BMX platform. One was in the middle of the month and the other came late in the month.

If the company holds two auctions this month, we could hear as early as next week whether it is still receiving high prices for the battery making ingredient. Stay tuned for that!

The post What could be sending the Pilbara Minerals share price 7% lower today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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 Scott Phillips.

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