Australian lithium miner, Pilbara Minerals Limited (AU:PLS) shares were down more than 6% in the afternoon. The stock’s plunge came after Morgan Stanley stated it had observed a sharp decline in lithium sales from one of the world’s largest lithium producers, Sociedad Química y Minera.
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According Morgan Stanley, September lithium exports by Sociedad Quimica y Minera de Chile (NYSE:SQM) look to have dropped 10% from the previous month. Additionally, the broker observed an 11% decline in SQM’s lithium prices compared to the prior month.
SQM is one of the world’s largest lithium miners, so its shipments can offer important insights into market trends. While SQM’s figures weren’t great for Pilbara shares, the company itself reported strong revenue and profit numbers for FY2022 this week.
In another concerning observation for Pilbara investors, Morgan Stanley predicted lithium price falls in 2023. While the broker expects lithium demand to remain strong, it sees increasing supply, weighing down prices. Lithium is used in the making of batteries for electric cars and other renewable products.
Pilbara Minerals share price forecast
Pilbara Minerals shares have gained more than 150% over the past year, and have more than doubled in the past three months. According to TipRanks’ analyst rating consensus, Pilbara stock is a Hold based on two Buys, four Holds, and two Sells. The stock’s rise seems to have been so rapid, that the average Pilbara Minerals share price forecast of AU$3.96 now implies 16% downside potential.
Concluding thoughts
While market fluctuations impact daily share prices, long-term, the future looks promising for lithium producers like Pilbara Minerals, given the overall global shift to renewable energy.
