Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
Pilbara Minerals Ltd said on Wednesday it had signed a five-year deal to supply spodumene concentrate, a mineral mined for its lithium content, to China-based Yibin Tianyi.
The Australian lithium miner said deliveries of the concentrate from the Pilgangoora project to Yibin Tianyi, a unit of China’s Suzhou TA&A Ultra Clean Technology Co, would rise to 75,000 tonnes per annum (tpa) from 2021 onwards, compared with 60,000 tpa in 2020.
Shares of the West Perth-based company were trading 10.3% higher by midday, while the broader market rose 3.5%.
The miner also said it was yet to see any material impact to the Pilgangoora operations in Western Australia from the coronavirus pandemic, but has faced some disruption within the supply chain in China, the company’s biggest market and the epicentre of the outbreak.
“Demand (for lithium) in the near term will likely be tempered with end-use demand expected to remain soft in response to coronavirus,” the company added.
Even before the virus outbreak, lithium miners in Australia had flagged weak prices for the battery metal persisting this year on an ease in demand from slowing electric vehicle sales.
Yibin Tianyi is currently building a lithium chemical plant in China and is a key part in the network of Contemporary Amperex Technology Co Ltd (CATL), the world’s largest lithium-ion battery maker and a major shareholder in Pilbara Minerals.
In January, Yibin Tianyi began offtake discussions with another Australian lithium player, AVZ Minerals, after taking a 12% stake in the company.
(By Anushka Trivedi; Editing by Devika Syamnath)
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