Why did Pilbara Minerals’ (ASX:PLS) share zoom ~150% in 2021?

Highlights 

  • Shares of Pilbara Minerals (ASX:PLS) have recorded significant gains since the last week of May 2021.
  • Lithium prices have increased significantly in the last year on the back of strong demand and tight supplies.
  • Nearly 46% of the world’s total lithium produced is used in the manufacturing of rechargeable batteries.

Source: © Alexandersikov | Megapixl.com

Shares of ASX-listed lithium player Pilbara Minerals Limited (ASX:PLS) surged ~11.3% to AU$2.25 on Monday after plummeting more than 7.08% last week. However, the company has managed to record decent gains of 30.81% in the last month. Also, the shares have zoomed magnificently by 542.86% in the last 52 weeks.  

At the same time, lithium prices have also risen considerably by about 98.92% in 2021 on the back of strong demand from the battery manufacturing sector and tight supplies from the leading producers of the world.

Related Article: Lithium player Pilbara Minerals (ASX:PLS) hits an all-time high

The silver-white light metal is extensively used in the manufacturing of batteries of portable devices, electronic gadgets, and most significantly in electric vehicle (EV) batteries. Around 46% of the world’s total produced lithium is used for the manufacturing of rechargeable batteries.

Source: Copyright © 2021 Kalkine Media

Lithium-powered new age rechargeable batteries are the backbone of EVs that provide lesser charging time and higher power to EVs. As per the International Energy Agency (IEA) data, the registration of electric cars has increased massively by 41% in 2020. The demand is anticipated to increase from 3 million to 26 million by 2030.

Related Article: Why Pilbara Minerals (ASX:PLS) shares shot up 20% in 2021

A blend of government support in the form of subsidies to buy EVs and a global push towards the utilisation of green fuels in place of carbon-emitting fossil fuels has ramped up the demand for EVs.

Pilbara’s Upward Trajectory

Shares of the lithium player followed an upward trajectory with the start of the last week of May. The company has announced significant results that pushed the shares of the company to record high levels.

In June’s last week, PLS has encountered exceptional exploration and development drilling results along the southern corridor at Pilgangoora.

Read More: Lithium Market Rebounds, Pilbara Minerals (ASX:PLS) at 52-week High, What’s Next?

Two days later to the Pilgangoora announcement, the management of the company had approved the staged restart of the Ngungaju Operation to ramp up the lithium production in response to strong demand for lithium.

The shareholders started to enjoy the gains in June when the company released its June-ending quarterly update, stating a record production of 77,162dmt spodumene concentrate and a record shipment of 95,972dmt spodumene concentrate during the quarter.

Source: © Xura | Megapixl.com

Moreover, a parallel surge in the prices of lithium that skyrocketed nearly 30% from March to August has also played a vital role to push the share prices of various ASX-listed as well as globally listed lithium stocks. Prices of lithium have almost doubled in the last nine months. Lithium is currently trading at CNY92,500 per tonne as of 23 August 2021.

Good Read: Rising lithium demand boosts Albemarle’s profits; ASX lithium stocks in focus

Bottom Line

Shares of Pilbara Minerals have galloped significantly starting from the last week of May on the back of various positive updates from the company and a significant price surge in lithium prices.

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