Orocobre says price per tonne of lithium down 24%
Orocobre (TSX:ORL) said today that its average price per tonne of lithium carbonate was down 24% to $5,419 compared to the same quarter a year ago.
Orocobre, which runs its Salar de Olaroz in Argentina's “Lithium Triangle”, released its operation report for the quarter.
Gross cash margins were squeezed, dropping 41% quarter-on-quarter to $1,310 per tonne. The company said it was able to reduce operating expenses 16%. The company said it was still able to stay cash-flow positive.
Looking forward, the company said low prices are shaking out suppliers.
"Growing pressure on non-integrated Australian hard rock suppliers became increasingly apparent resulting in one mine going into care and maintenance. Meanwhile, others announced a shift from continuous to campaign-based production driven by customer orders rather than the previous approach of maximizing operational output," said the company in a news release.
The whole lithium industry has been backed into a corner. Last week Australia-based lithium producer Galaxy Resources (ASX:GXY) is slashing output at its Mt Cattlin operation to conserve mineral resources until market conditions improve. Nemaska Lithium, which is in creditor protection, halved its workforce.