Daily Metal Prices
Lithium Alert: Orocobre & Galaxy resources Q1 2020
Signum BOX / Apr 23
Orocobre (ORE:AU) Q1 2020
Orocobre released operational results for the first quarter of 2020:
- Production during the quarter was 2,732 tons, 24% less than in Q4 2019, and 11% lower than Q1 2019. Decreased production is due to the the government-decreed total lockdown in March. However, on April 11, the government established that specific strategic industries, including lithium, could operate again.
- Sales reached 2,518 tonnes, down 23% from Q4 2019, and 29% lower than in Q1 2019.
- The average sale price this quarter was US $ 4,810 per tonne FOB, 49% lower than the average price observed in Q1 2019.
- Regarding expansion projects, the company comments that the LiOH project in Japan is advancing. However, phase II of the expansion in Olaroz is in stand-by with 35% of progress.
- Finally, Orocobre comments that, given the current uncertainty, it will most likely not provide the sales guidance for this year.
I would like to comment that regarding prices, we have actually seen a sharp downward trend during the last months, and we believe that this trend will continue in the coming months. However, our estimate for the average price for lithium carbonate in the first quarter of the year is US $ 9,173 per tonne, nearly double Orocobre's realized price (on a FOB basis). We understand that this is mainly due to quality issues. We therefore do not consider Orocobre's average price as a reference price for the market.
Galaxy Resources (GXY:AU) Q1 2020
Galaxy Resources released results for the first quarter of 2020:
- The Mt. Cattlin (Australia) operation continues to operate normally.
- The Sal de Vida project in Argentina will continue essential on-site services, while off-site engineering work continues.
- Although Galaxy says they continue to operate normally in Australia, mineral production in the quarter was 154,457 tonnes, 62% less than in the first quarter of 2019. The company also reported a lower average grade of 1,03% Li2O, 10% lower than the 2019 average grade.
- In terms of concentrate, production in the quarter was 14,306 tons, 65% lower than Q1 2019. Concentrate shipments, meanwhile, increased by 134% compared to the first quarter of 2019 and 19.3% compared to the fourth quarter of 2019, reaching 35,512 tons.
- Average cash costs significantly increased for the period, mainly due to the smaller scale of production. The average cost in the quarter was US $ 592 per ton, 46% higher than in the previous quarter and 30.7% higher than the first quarter of 2019.
- Regarding prices, the company commented that they continue with the downward trend but didn’t specify average selling price.
- Photo: Orocobre