Why ASX: PLS Is Surging – Is It Too Late to Buy?

Lithium Giant Back in the Spotlight

Pilbara Minerals Ltd (ASX: PLS) has once again captured the attention of investors, with its share price climbing sharply in recent sessions. On Monday, PLS surged over 16% to close at A$2.26 after reports emerged that China’s battery powerhouse CATL had been forced to suspend operations at its Jianxiawo lithium mine due to licensing issues. This mine accounts for a notable portion of global supply, and the sudden disruption has triggered a wave of buying interest in lithium producers worldwide.

For Pilbara Minerals, this news comes on the back of an already impressive rebound. The stock has now rallied more than 25% in the past month and has recaptured price levels not seen since early March. Investors are speculating that tighter supply conditions could put a firm floor under lithium prices, potentially boosting margins for low-cost operators like PLS.

A Strong Foundation for Growth

Pilbara Minerals isn’t just riding the coattails of short-term news. The company owns and operates the Pilgangoora Project in Western Australia — recognised as one of the world’s largest hard-rock lithium operations. Recent exploration results delivered a 23% increase in contained lithium, pushing total resources to 446 million tonnes at 1.28% lithium oxide. This reinforces Pilgangoora’s status as a world-class asset, offering decades of potential production.

Operationally, Pilbara Minerals has shown resilience. While FY25 Q3 production dipped due to planned maintenance and weather disruptions from Cyclone Zelia, the company managed to secure a 7% lift in realised lithium prices, generating A$39 million in cash margin from operations. In an environment where many lithium producers are struggling with price weakness, this underscores the quality of PLS’s cost base and marketing strategy.

The Market Context – Why Lithium Matters Now

Global demand for lithium remains underpinned by the accelerating adoption of electric vehicles, renewable energy storage, and advanced battery technologies. Although prices have experienced volatility in the past 18 months, the long-term demand trajectory remains positive.

The CATL mine suspension adds an extra layer of intrigue to the market. If supply from China tightens and demand growth continues as projected, this could spark a renewed uptrend in lithium prices. For companies like Pilbara Minerals, this represents an opportunity to capture higher margins without materially increasing costs.

Analyst Price Targets Already Surpassed – What Next?

Earlier this year, Bell Potter maintained a Buy rating with a A$2.00 target, while Macquarie retained an Outperform rating with a A$1.50 target. These calls were made when the stock was trading well below current levels.

Now, with PLS closing at A$2.26, the stock has already surged past Bell Potter’s target and is trading significantly above Macquarie’s estimate. This raises a critical question for investors — can the rally sustain itself, or is a pullback on the horizon?

The answer depends on several factors:

• Whether lithium prices continue to firm following the CATL mine disruption.
• The company’s ability to maintain low production costs amid global inflationary pressures.
• Broader investor sentiment towards the battery metals sector in the coming months.

A sustained break above the A$2.20–A$2.30 zone could open the door to further upside, but if sentiment cools, profit-taking could bring the stock back towards earlier support levels.

Technical and Trading Signals

From a technical perspective, PLS has broken decisively through a key resistance level around A$1.90, which capped rallies earlier in the year. Volume has spiked sharply alongside price — often a sign that larger institutional investors are taking positions. If momentum holds, the next upside target could be in the A$2.40–A$2.50 range, with potential for a retest of 2024 highs above A$3.00 if lithium market conditions improve.

Is There Still Opportunity?

The recent rally in PLS is backed by both fundamental news and improving sentiment across the lithium sector. While the share price has moved rapidly, the combination of a world-class asset, disciplined cost management, and potential tailwinds from global supply constraints keeps Pilbara Minerals firmly in focus for lithium investors in 2025.

For those considering an entry, the key will be timing and risk tolerance. Lithium remains a volatile commodity, and sharp swings are part of the investment landscape. But for investors who believe in the long-term EV and battery storage story, PLS may still have chapters left to write in its recovery.

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