The Pilbara Minerals Ltd (ASX: PLS) share price has been under pressure this year as it’s fallen just over 41% lower in 2019.
That wasn’t the case last week though as Pilbara shares rebounded a whopping 21.43% to close at $0.35 per share on Friday afternoon. In early trade this morning, PLS shares have jumped 7.25% higher to $0.37 per share.
So, what’s driving the Pilbara Minerals share price higher and will it continue this week?
Why the Pilbara Minerals share price charged higher
Pilbara shares surged 10% higher last Monday alongside fellow lithium miners Galaxy Resources Ltd (ASX: GXY) and Orecobre Ltd (ASX: ORE).
The big news moving lithium miners last week was Chile blocking access to lithium operations across the country.
An article from Reuters said indigenous communities in the Atacama salt flats had halted Chile’s lithium operations.
The disruptive action comes amid nationwide rallies over inequality and the wealth divide in Chile.
Supply concerns saw lithium prices surge and with it the share prices of several big-name ASX miners.
Soft quarterly numbers saw Pilbara shares dip on Tuesday but the Aussie miner still finished the week strong.
Management said the September quarter production numbers were “moderated” at its Pilgangoora project.
The Aussie miner also held onto its Pilgangoora minority interest due to softening market conditions.
Those conditions and lower customer demand were big factors that hit Pilbara’s quarterly production numbers hard.
Pilbara produced 21,322 dry metric tonnes (dmt) of spodumene concentrate during the quarter, down from 63,782dmt in the June quarter.
Pilbara shares bounced back on Friday to climb 6% higher as momentum boosted Aussie lithium stocks across the board.
Should you buy Pilbara shares?
While the Chile obstruction has seen a spike in lithium prices, I think it’s too risky to buy in just yet.
As a buy-and-hold investor, I’d want to see consistently strong production and cash flow before buying.
The Pilbara Minerals share price might have climbed over the past week, but is still down more than 41% since the start of the year.
The post Why the Pilbara Minerals share price is surging higher appeared first on Motley Fool Australia.
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