AGORACOM Small-cap Investor Relations Blog

• Nickel, which recently hit its lowest since December, could climb as high as $16 000 a tonne by the end of 2018 and $18 000 a year later, Macquarie Capital senior commodities consultant Jim Lennon said on the sidelines of the MetalBulletin 6th Asian Nickel Conference in Jakarta on Wednesday.
• Nickel has been supported by stainless steel demand growth that exceeded 9% in the first half of 2018, Lennon said.

JAKARTA – Slower production increases in leading supplier Indonesia and continued growth in stainless steel demand are forecast to extend a supply shortage in the global nickel market, supporting price gains through 2019.

Nickel, which recently hit its lowest since December, could climb as high as $16 000 a tonne by the end of 2018 and $18 000 a year later, Macquarie Capital senior commodities consultant Jim Lennon said on the sidelines of the MetalBulletin 6th Asian Nickel Conference in Jakarta on Wednesday.

Nickel has been supported by stainless steel demand growth that exceeded 9% in the first half of 2018, Lennon said.

But concerns have emerged in recent months that global growth has peaked against the backdrop of an evolving trade war between the United States and China, dampening the outlook for the 2.2-million-tonne per year global nickel market, he said.

As a result, nickel prices had “overshot to the downside”, he said, noting that he expects China to relax its credit policies and introduce measures to stimulate growth that would underpin steel demand, while nickel output growth will remain slow for the rest of 2018.

Supply disruptions at Eramet‘s mines in New Caledonia and China‘s planned pollution controls in 40 cities, coupled with slow output growth in Indonesia, could also support a recovery in nickel prices this year, Lennon said.

“Inventories are coming down so prices should be moving higher.”

According to Norilsk Nickel principal nickel analyst Alexander Khodov, the global nickel market deficit could extend for three years from a shortfall of 120 000 t in 2018.

“Next year the deficit will probably slightly decrease as a result of a ramp-up in NPI (nickel pig iron) production here in Indonesia (and) a slight increase in NPI production in China, but the deficit will still be around 80 000,” Khodov told Reuters.

Wood Mackenzie metals analyst Linda Zhang also forecast growth in nickel prices to $14 400 this year and $16 670 in 2019, with the market facing a deficit of 73 000 t this year and 63 000 tin 2019.

Nickel recovered from an 8-1/2 month low on Wednesday, but gains were capped by fresh sparring between Washington and Beijing over trade and by sinking steel prices in China.

Three-month nickel on the London Metal Exchange was bid up 1.2% in official midday rings to $12 375 a tonne, having hit its lowest since late December at $12 085.

Source: http://www.miningweekly.com/article/nickel-price-to-benefit-from-short-supply-strong-steel-demand-through-2019-2018-09-12

• Growth in nickel demand from the stainless steel and electrical vehicle (EV) sectors were the main topics of discussion at the Anglo American nickel seminar in Shanghai on Thursday September 6.
• Increasing sales of EVs since 2012, in response to global subsidies for the production of EVs with a longer driving range, has resulted in accelerated nickel-containing battery output.

By Violet Li

Increasing sales of EVs since 2012, in response to global subsidies for the production of EVs with a longer driving range, has resulted in accelerated nickel-containing battery output.

“While nickel prices have been low in the past several years, it has been a fantastic time for end users and the growing use of nickel,” nickel analyst Barry Jackson of Anglo American said.

The three-month nickel price on the London Metals Exchange stood at $12,360-12,400 per tonne on Friday, vastly down from the all-time peak at $48,695-48,700 per tonne on April 2007, but up year on year from $11,640-11,650 per tonne.

There has been substantial growth in new nickel applications, such as EV, and existing nickel application in stainless steel, with the share of nickel contained in stainless steel and usage of nickel in batteries rising since 2007.

“The two very positive trends for nickel consumption in batteries will be the growing share of Ni-containing lithium-ion batteries and growing share of nickel in the batteries,” Jackson added.

Batteries for stationary storage is a growing area for nickel consumption. Meanwhile, home energy storage holds another potential end use for nickel.

Other speakers at the seminar also pointed to urbanization and modernization in infrastructure as positive growth markets for nickel use.

“With the urbanization in China and other countries, water distribution infrastructure will embrace a booming era, and that also means more nickel usage,” Philip Song, chief representative manager in China of the Nickel Institute, said at the conference.

Source: https://www.fastmarkets.com/article/3831794/ev-sector-growth-supports-robust-nickel-outlook-anglo-american-nickel-seminar

• As the global economic outlook continues to improve, the unmissable overarching theme at this year’s Diggers & Dealers has been nickel’s turnaround, with most analysts, miners and explorers alike believing the commodity’s upturn has only just begun.
• The fundamentals for nickel look excellent going forward

Panoramic Resources (ASX: PAN) managing director Peter Harold told Small Caps he noticed the nickel market had “tightened materially” throughout the first half of this year, underpinned by slipping London Metals Exchange stockpiles which have dropped from more than 350,000t to about 250,000t.

“The fundamentals for nickel look excellent going forward,” he said.

“On the demand side, stainless steel consumption is growing year-on-year and demand for nickel sulphate in electric vehicle batteries is forecast to grow strongly.”

Mr Harold added the supply/demand deficit for nickel this year was anticipated to hit a “record” 200,000t or more.

“Further deficits are forecast for the foreseeable future,” he noted.

“While the current trade war rhetoric has had a negative impact on all base metal prices over the past few months the nickel fundamentals are unchanged. I have seen nickel price forecasts of between US$8-10/lb for 2019-2021, which would seem plausible if the supply deficits continue.”

Deutsche Bank has predicted nickel will end 2018 at around US$7.02/lb and jump to US$8.42/lb in 2019, then climb to US$9.45/lb in 2020.

In the past 12 months, nickel has picked itself off the ground and staged a come back, with the price rising from around US$4.50/lb to its current level of about US$6/lb after pushing past US$7/lb in April and June.

Commenting on the nickel price, Western Areas (ASX: WSA) managing director Dan Lougher said it was “still a bit wobbly”, but that “times were changing” for nickel, due to its consumption within the growing electric vehicle and lithium-ion battery sectors.

Rox Resources (ASX: RXL) managing director Ian Mulholland told Small Caps nickel had clearly been the star commodity in the last 12 months.

And as a result, he said investor interest in the company’s high-grade nickel sulphide assets had “absolutely” increased.

He added he anticipated this would continue as demand for the commodity continues its upward trajectory and London Metals Exchange stockpiles carry on diminishing.

Meanwhile, financial services company UBS has reported that nickel was its “preferred play” during the next 12 months due to its uptake in electric vehicle batteries, with demand “rapidly rising”.

If the nickel sentiment at this year’s Diggers & Dealers is anything to go by, then nickel stocks will be one to watch in the coming months.

Source: https://smallcaps.com.au/nickel-steely-resolve-shines-miners-diggers-dealers/

• Graphite also failing to keep up with electric boom: Benchmark
• Nickel looks set to double by 2022 amid shortage: WoodMac
• Research commissioned by commodities trading giant Glencore Plc indicates that global demand for nickel in electric vehicles will hit nearly 1 million metric tons by 2030

Locking in supplies of key battery raw materials lithium and cobalt has been a headache for electric car manufacturers, but these days it’s the supply of nickel and graphite that’s keeping them up at night.

Carmakers bracing for a surge in electric vehicle sales in the early 2020s are increasingly worried about where they’ll get enough nickel and graphite to go into batteries, according to Simon Moores, managing director at Benchmark Mineral Intelligence. Concern about lithium and cobalt has eased as miners ramp up production at new projects.

“It was lithium and cobalt for the last few years that they worried about,” Moores said at a press briefing in London. “In the last four months it’s shifted; they seem pretty confident that the lithium and cobalt will be there in that timeframe.”

Investors and miners are already alert to the risk that supply will fall short of demand. Research commissioned by commodities trading giant Glencore Plc indicates that global demand for nickel in electric vehicles will hit nearly 1 million metric tons by 2030. That amounts to 55 percent of the metal produced globally in 2017. Prices look set to double by 2022, but producers still aren’t likely to keep up with demand from the automotive industry, according to Wood Mackenzie.

The buoyant outlook for battery demand has helped insulate nickel from a selloff in base metals over the past few weeks. Prices are up 5.7 percent so far this year at $13,490 a ton, while other base metals trading on the London Metal Exchange are down across the board.

As was the case with lithium and cobalt, there’s growing anxiety about how nickel and graphite producers will supply metal of the right quality in the right quantities when electric vehicle sales start to hit the mainstream, Moores said.

But investors betting on nickel’s battery-powered future may have a tougher time than those who have been chasing returns in the cobalt and lithium industry, Benchmark Minerals analyst Caspar Rawles cautioned.

“The one problem that nickel potentially faces is that investors are trying to catch what happened with nickel and cobalt a couple of years ago, and it’s premature,” Rawles said in London. Currently, it’s conventional usage in stainless steel that’s driving demand, and it will be several years before the red-hot battery market starts making an impact on prices, he said.

Source: https://www.bloomberg.com/news/articles/2018-07-24/nickel-is-new-headache-for-automakers-as-cobalt-fears-abate