SHANGHAI, Feb 22 (SMM) - Australian lithium giant Pilbara Minerals announced on the morning of February 20 that it signed a sales agreement on 15,000 mt of spodumene concentrate based on processing trade for the first time. It seems that the the company has made another attempt to innovate lithium ore trading since it created spodumene concentrate auction on July 29, 2021.
However, Chen Shiyi, C&D's senior operator engaged in lithium, expressed different views.
"The Pilbara is not successful in innovating lithium ore trading, in fact. It is a common practice to set spodumene prices based on lithium salt prices, which is nothing new.
Pilbara has carried out ore auctions in the past two years, and price quotation agencies could refer to their previous auction prices. In response, Pilbara has also gradually switched to referring to prices provided by these agencies, hoping to get rid of the impact of volatile lithium salt prices.
It seems that Pilbara wants to hike the spodumene prices, but its ulterior motive is to alter the pricing mechanism. In other words, Pilbara is in pursuit of pricing power.
But now the company resorts to setting spodumene prices via lithium hydroxide prices, which is actually going backwards, so in essence Pilbara did not completely succeed in seizing pricing power. A potential crisis has been prevented in the domestic lithium market, but the game is still on.”
Regarding the pricing of lithium concentrates, SMM learned that previously, Pilbara Minerals usually associated their prices under long-term orders with the prices of lithium salts, but at the beginning of the year, there were rumours that the company may set prices based on quotes provided by agencies. Pilbara's changing the business model in the new agreement has now dismissed the rumours.
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