Allkem (ASX:AKE) - CEO and Managing Director, Martín Pérez de Solay
CEO and Managing Director, Martín Pérez de Solay
Source: Allkem
The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

  • Lithium big-cap Allkem (AKE) highlights record lithium prices and soaring battery metals demand in its quarterly report for the three months to the end of December 2021
  • The company tabled US$60.7 million (A$84 million) in revenue from lithium sales from its WA Mt Cattlin mine over the quarter and $107 million (A$148 million) from all operations
  • Though sales volumes were lower than the quarter before, an average price of US$1595 (A$2210) per dry metric tonne of lithium concentrate helped drive the strong revenue
  • Allkem say it had US$426.6 million (A$591 million) in the bank at the end of December and it expecting lithium demand to remain strong this year
  • Shares in Allkemaere up 2.99 per cent at 11:19 am AEDT to trade at $11.70 each

Shares in Lithium big-cap Allkem (AKE) opened green this morning in light of record lithium prices and soaring battery metals demand in the December quarter of 2021.

Allkem, which is the product of the merger between Galaxy Resources (GXY) and Orocobre (ORE) last year, this morning said it tabled US$60.7 million (A$84 million) in revenue from lithium sales from its WA Mt Cattlin mine over the December quarter — several times higher than both the March and June quarters last year, but lower than the September quarter.

It came even as Allkem shipped just over 38,000 dry metric tonnes (dmt) of lithium concentrate over the quarter — less than the September quarter’s 89,600 dmt and the June quarter’s 48,500 dmt.

It was an average price of US$1595 (A$2210) per dmt, then, that drove the strong revenue. For reference, the average sale price per dmt of lithium concentrate in the September and June quarters was US$796 (A$1103) per dmt and US$560 (A$776) per dmt, respectively.

Importantly, Allkem said an additional shipment of 23,000 dmt of material produced in 2021 will be made before the end of January 2022, effectively bolstering the 2021 sales figures further.

Allkem sold 3293 tonnes of lithium from its Olaroz project in Argentina for US$41.1 million (A$57 million) in revenue over the December quarter.

Group revenue for the business across all operations came in at US$107 million (A$148 million) for the quarter.

Allkem fell just short of its forecast Mt Cattlin mining figures over the 2021 calendar year, mining around 5.28 million bank cubic metres (bcm) of material compared to its annual prediction of between 5.4 million and 5.9 million bcm.

Nevertheless, production figures still managed to exceed forecasts: Allkem produced 230,000 dmt of concentrate from Mt Cattlin material, above its annual guidance of between 210,000 and 220,00 dmt.

Allkem said it had US$426.6 million (A$591 million) in the bank at the end of December, of which US$118.8 million (A$165 million) was being held as a guarantee for debt facilities as the company worked to reach practical completion for the expansion of its Japanese Naraha and Argentinian Olaroz operations.

What’s next for Allkem?

Looking ahead, Allkem said it expected to produce between 200,000 and 210,000 dmt of lithium concentrate at between US$400 and US$430 (between A$554 and A$596) per tonne from its Mt Cattlin operation over the 2022 financial year.

As far as industry predictions go, Allkem said record production volumes of lithium-ion battery materials and batteries in China was helping drive demand for lithium.

At the same time, electric vehicle sales across the world doubled in 2021 compared to the calendar year before, according to Allkem. This has helped lithium spot prices rally to all-time highs as demand exceeds supply.

As such, it seems the lithium craze may maintain its momentum for some time.

Shares in Allkem were up 2.99 per cent at 11:19 am AEDT to trade at $11.70 each. The company has a $7.46 billion market cap.

AKE by the numbers
More From The Market Online
The Market Online Video

Market Close: Green lights up on ASX for Easter hunt go

The ASX200 closed the day in record territory - nearly a per cent up with every…

Week 13 Wrap: Easter bunny delivers new all time high for ASX200

Another week, another all time high. The ASX200 clocked 7,901pts on Thursday for the first time…

Market shrugs as Fisher & Paykel announces mass recall

Fisher & Paykel has initiated a voluntary limited recall of batches of Airvo 1 and my…
The Market Online Video

Market Update: ASX glows red hot with another hit record

The ASX200 is trading up, hitting a new high of 7901 point and eclipsing the last…