Spodumene production was 83,476 dry metric tonnes, down from 85,759t in the September quarter.
It missed guidance of 85,000-95,000t, which was revised down from 90,000-115,000t in December, due to delays in commissioning plant improvement works, plant ramp-up initiatives and extended shutdowns due to ongoing labour shortages in WA.
Pilbara boss Ken Brinsden said the labour shortages, which were being experienced by all WA miners, were "impacting our ability to go as hard and fast as we'd like".
Brinsden said the company had been looking forward to the reopening of the WA border on February 5 to provide some relief, but would now have to wait longer.
Brinsden said the labour shortages were likely to have a more acute impact on the WA mining sector than any COVID-related interruptions once the border reopened.
"There's definitely some risk to production but it should be relatively transitory," he said.
The challenges have led Pilbara to review its full-year guidance, which was revised down in December to 400,000-500,000t of spodumene produced and 380,000-440,000t shipped.
Pilbara's December quarter shipments fell to 78,679t from 91,549t.
Average prices received were US$1750-1800/dmt, at the top end of guidance of $1650-1800/dmt.
Pilbara was receiving just $400/t a year earlier and about $650/t in mid-2021.
"The March quarter is already looking very, very strong," Brinsden said.
"Pilbara will be having its day in the sun."
The company expects March quarter pricing to rise to $2600-3000/t.
"Pricing is quite incredible," Brinsden said, pointing to the latest Platts figures which had hydroxide prices rising to above $60,000/t in China.
Last week, Canaccord Genuity lifted its 2022 price target for spodumene by 125% to $3425/t.
Brinsden said the supply situation remained challenged.
"It is tough to bring on additional capacity in an environment when you were previously being punished," he said.
"It's against that challenging environment that the price is surging.
"No disrespect to the analyst community, but it's easy to put supply numbers in a spreadsheet and not so easy on the ground."
Canaccord said 2022 could be another stand-out year for the lithium market, even after prices rose by 340-530% last year.
"However, after refreshing our supply/demand model for EV sales and lithium production we do not see an easy route for the market to balance throughout the year," the bank said.
"This is being reflected in spot pricing recently pushing over $50,000/t. We anticipate this pressure being maintained over at least the first six months of 2022 before additional supply reaches the market."
Pilbara shares hit an all-time high of A$3.89 earlier this month and dropped 0.9% today to $3.19.
