Orocobre Limited (ASX: ORE) shares have plummeted 5.6% in early trade to $2.36 per share at the time of writing. This slump comes off the back of the company’s latest lithium pricing update.
What did Orocobre announce today?
Orocobre provided its December quarter update for expected lithium carbonate pricing this morning.
The miner is anticipating an indicative weighted average price of lithium carbonate sales for the December quarter to be US$5,400 per tonne (A$7,921 per tonne).
Market conditions “remain soft” and Orecobre will meet current pricing to keep its market share.
Orecobre shares have already falled lower on the news today, as 2019 proves to be a difficult year for shareholders.
According to CEO Martin Perez de Solay, lithium chemical prices are “well below incentive pricing for green-fields projects.”
The group is forecasting a medium-term pricing recovery, but downgraded its price guidance for the quarter.
Orecobre expects to provide an update in the new year on its March 2020 sales, which remain under negotiation.
How have Orocobre shares performed this year?
There’s no denying that 2019 has been a tough year for the Aussie lithium miners, and Orocobre is no exception.
Orocobre shares had plummeted 21.14% as at yesterday’s close as supply and demand dynamics have hurt earnings, only to shave off another 5.6% this morning.
Global lithium prices have slumped amid concerns of oversupply and weakening demand. Much of the growth in lithium is forecast to come from electric vehicles and a battery storage boom, which is yet to materialise.
Orocobre shares did climb higher in August after the pure play lithium miner reported a 407% surge in net profit after tax.
Orocobre’s exposure to both inflation and currency devaluation issues amid economic troubles in Argentina have also been a factor this year.
Orocobre is far from alone though, with Galaxy Resources Ltd (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS) similarly struggling on the ASX this year.
The post Orocobre shares slump 5% after lithium pricing update appeared first on Motley Fool Australia.
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