- Orocobre (ORE) has announced it will drop its lithium sales to meet with the struggling market
- It is now expecting the average price of lithium carbonate for the December quarter to be approximately $8,000 per tonne
- The lithium market is currently struggling with oversupply and not enough demand, however, the market is expecting a boom with the rise of the electric vehicle market
- On market close, Orocobre is down 3.20 per cent and trading at $2.42 apiece
Orocobre (ORE) will drop its lithium sales to meet with the struggling market.
The company said the average price of lithium carbonate for the December quarter is now expected to be approximately US$5,400/ tonne (A$7,921 per tonne).
Lithium market conditions remain soft and Orocobre has made the decision to meet current pricing to ensure retention of market share.
Orocobre is forecasting a medium-term pricing recovery but downgraded its price guidance for the quarter.
“Lithium chemical prices are well below incentive pricing for green-fields projects but are expected to recover in the medium term," CEO Martín Pérez de Solay said.
"Whilst our price guidance for the quarter has decreased, operational and cost improvements will limit the impact on our operating margin," he added.
It is no secret that 2019 has been a challenging year for Aussie lithium miners. The global lithium prices have dropped due to oversupply and no demand.
Orocobre is not alone in the struggle, just yesterday Galaxy Resources passed of a lithium miner to a Chinese buyer.
However, there is a forecast growth to come for the market due to electric vehicles and a battery storage boom.
Martín says that Orocobre is in the fortunate position of having a very strong balance sheet.
"The business continues to focus on reducing the cost of production through this period of market weakness, to maintain our position as one of the lowest-cost producers of lithium chemicals," he said.
The company says sales for the March 2020 quarter remain under negotiation and Orocobre will provide an update on the expected price in the new year.
On market close, Orocobre is down 3.20 per cent and trading at $2.42 apiece.