Australia's Pilbara Minerals reported a 46% sequential drop in its second-quarter revenue on Wednesday as average realised price for spodumene halved, and lowered annual capital expenditure guidance.
Australian lithium producers may be set to track the nickel industry in project curtailments and delays this reporting season, analysts say, given slower-than-expected electric vehicle (EV) sales that have hit prices but the jolt is expected to be less severe.
"Market pricing for spodumene concentrate and lithium chemicals is expected to remain volatile in the near-term given uncertain macroeconomic conditions," Pilbara said.
The company said it is focusing on cutting costs to preserve its cash and was going ahead with expansion plans to create intermediate products which it can fund from its reserves.
The company cut its fiscal 2024 capital expenditure forecast to A$820 million-$875 million from A$875 million-A$975 million.
"With confidence in the long-term outlook, the Group is continuing with its previously announced strategy of prioritising investment in expanding production through the P680 and P1000 Projects," the company added
This will yield both increased production capacity and result in scale benefits such as reduced unit costs to strengthen the profitability of the operation, it added.
Pilbara posted revenue of A$264 million ($173.71 million) for the quarter ended December 31, down from A$493 million in the previous quarter.
($1 = 1.5198 Australian dollars)