June 25, 2020 / 1:04 AM / 18 days ago

Australia's Orocobre warns of 53% plunge in June-quarter lithium sales volume

(Reuters) - Australia’s Orocobre Ltd (ORE.AX) on Thursday warned sales volume of lithium carbonate would more than halve in the June quarter from its flagship Olaroz mine, and brought forward its scheduled maintenance period for the Argentinian project.

The miner said it expected total sales volume for the lithium by-product to be 1,600 tonnes during the April-June period, compared with 3,387 tonnes last year, as restrictions to curb the spread of the coronavirus dented production and demand for the metal.

Shares of the miner fell 4.3% to A$2.45 in early trade, compared with a 1.7% drop in the broader market .

The warning highlights the extent of the damage from the coronavirus-driven downturn that saw demand for commodities plummet globally and economic activity grind to a halt.

“While most logistical issues have now been addressed, delivery of product is yet to return to normal as customers delay shipments due to lower production and excess inventory,” the company said in a statement.

Owing to a slump in demand, Orocobre said maintenance at Olaroz will take place in late July or early August, earlier than it had expected, and would stop operations there for up to three weeks.

It added that in China, sales of electric vehicles, which use lithium as one of their key components, had modestly improved due to guaranteed subsidies, and forecast a further rise if international brands became available to buyers.

The company also expects to benefit from some European countries supporting sales and manufacture of electric vehicles.

Reporting by Sameer Manekar in Bengaluru; Editing by Himani Sarkar and Rashmi Aich

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