AGORACOM Small-cap Investor Relations Blog

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

BGL Metals Insider Says Nickel Forecasted to Shine

• While stainless steel has historically been the primary end market for nickel, increased adoption of electrification in vehicle production is shifting demand for the material with advancements in battery technology
• This structural shift is expected to change the supply and demand dynamics within the nickel market

CHICAGO and CLEVELAND, Dec. 18, 2019 – Technological advancements in the transportation industry are setting the stage for a surge in nickel demand, according to the Metals Insider, an industry report released by Brown Gibbons Lang & Company (BGL). While stainless steel has historically been the primary end market for nickel, increased adoption of electrification in vehicle production is shifting demand for the material with advancements in battery technology. This structural shift is expected to change the supply and demand dynamics within the nickel market.

Technological advancements in the transportation industry are setting the stage for a surge in nickel demand, according to the Metals Insider, an industry report released by Brown Gibbons Lang & Company (BGL). While stainless steel has historically been the primary end market for nickel, increased adoption of electrification in vehicle production is shifting demand for the material with advancements in battery technology.

Industry participants cite battery demand as a transformational development for the nickel industry, with vehicle electrification and global tightening of emissions standards key drivers underpinning market growth:

• Market forecasts quantify the shift to electric mobility, which predict a nearly five-fold increase in electric vehicle (EV) models by 2030, when one in five passenger cars sold globally will be battery electric vehicles. Government initiatives are driving EV growth, notably stringent enforcement of emissions standards supported by targeted bans on internal combustion engine vehicle sales.
• Nickel consumption in EV batteries could expand ten-fold by 2025, with battery demand projected to more than triple to an estimated 15 percent market share– up from 4 percent today.
• Major nickel producers are validating the demand shift and investing to support double-digit volume growth, with nickel integral to strategic business models. Manufacturing capacity, raw materials availability, and advancements in new battery technologies are critical variables that will impact the supply outlook.

The nickel market is expected to undergo a structural shift across the value chain that will impact supply demand dynamics for stainless steel and nickel producers, distributors, manufacturers, and the major end markets they serve, with the oil & gas, aerospace, and food industries among the large consumers of the nickel- bearing material.

About Brown Gibbons Lang & Company
Brown Gibbons Lang & Company is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, divestitures, capital markets, financial restructurings, valuations and opinions, and other strategic matters. BGL has investment banking offices in Chicago, Cleveland, and Philadelphia, and real estate offices in Chicago, Cleveland, Denver, San Antonio, and San Diego. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 30 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit www.bglco.com. 

Source: https://www.prnewswire.com/news-releases/bgl-metals-insider–nickel-forecasted-to-shine-300976918.html

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

The future of nickel: tensions, trade bans and technology

• It’s an interesting time for nickel on the global markets
• Prices have risen dramatically despite trade tensions between the US and China, and are expected to explode as Indonesia and the Philippines prepare for nickel export bans

By Umar Ali

Indonesia’s export ban

With increased demand for stainless steel production and recent developments in technologies such as electric vehicles, demand for nickel is higher than ever. Unfortunately, this demand is struggling against an increasingly tightening supply of the essential metal.

In response to the risk of this increasing demand tightening local supply, the Indonesian government announced in September 2019 a ban on the export of raw nickel ores, bringing the ban forward from 2022 to January 2020.

According to GlobalData analyst David Kurtz, this ban is intended to produce value-added nickel products, stimulate domestic processing of ore, and make the country a hub for electric vehicle production.

Indonesia is the largest global producer of nickel and a major supplier of the metal to China’s stainless steel industry; in anticipation of the ban, Chinese producers are building up nickel inventories.

This has increased the price of nickel significantly, with prices at the end of September 2019 reaching more than $16,000 per tonne, an increase of more than 60% from January. When the ban was announced, nickel prices increased by 8.8% to reach a peak of $18,620 per tonne, the highest price since 2014.

While over half of Indonesia’s nickel is processed in the country, around 218,000 tonnes of the metal is unprocessed and would be affected by the ban, which represents around 10% of global demand.

Concerns over supply have led to LME nickel warehouse stock levels dropping by almost 50% since the announcement of the ban, with Reuters reporting that stocks have fallen to 79,800 tonnes, the lowest since January 2009, as of 24 October 2019.

Potential for the Philippines?

The mining sector in the Philippines is expected to benefit from the supply gap created by this export ban, with the country’s nickel industry having suffered in recent years.

As the second-largest producer of nickel, the Philippines accounted for nearly 16% of global production in 2018.

However, production volumes fell sharply in 2016 when the country’s Department of Environment and Natural Resources launched an audit process for over 40 metallic mines, resulting in a number of suspensions and 27 closures. Of these 27 mines, 19 were involved in nickel production, resulting in a drop in nickel production of over 100kt.

Since the shutdowns, output has steadily increased but has become dependent on a smaller number of operations, particularly in the mining region of Caraga. According to Kurtz, the ban in Indonesia “paves the way for higher exports of nickel from the Philippines to China.”

However the shutdowns in the Philippines, as well as the lower quality of nickel ore in the Philippines compared to Indonesia, are expected to challenge this financial growth. The lower grade of nickel ore in the Philippines is a particular problem for Chinese operators, as it affects the ability of nickel pig iron producers to achieve the necessary purity mix for stainless steel production.

With China being a significant importer of nickel, particularly for its stainless steel production, the ongoing trade dispute between the US and China has had a considerable influence on nickel prices.

Prior to the announcement of Indonesia’s export ban, nickel prices fell steeply in the second half of 2018, but has eased in anticipation of trade talks later in 2019. Indonesia’s export ban has also allowed the price of nickel to fare better than other metals such as copper, avoiding the longer-term financial concerns seen across the resources sector.

Future prospects

Primary nickel production is forecast to rise by 9-10% in 2019 to reach 2.4MT, primarily driven by an increase in Indonesia from rising production in new mines. Demand for nickel in China is expected to grow over 2.1Mt, as opposed to the 1.6Mt estimated for 2019.

According to analytics from GlobalData, the number of electric vehicles is expected to increase from 1.6 million in 2018 to 6.8 million in 2023, and the demand for nickel for lithium-ion batteries is expected to quadruple over this period from 3-4% in 2019.

With the export bans in place, nickel prices are expected to remain high while stocks remain low. However, any escalation of the trade tensions between the US and China could lead to a fall in prices, and there remains the possibility of Indonesia relaxing their export ban (as it did previously in 2017 for a ban established in 2014).

This reversal applied to operators working on building processing capacity, and came about due to losses incurred by stated-owned nickel exporter PT Aneka Tambang as well as a need to ease the country’s budget deficit.

Source: https://www.mining-technology.com/features/the-future-of-nickel-tensions-trade-bans-and-technology/

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

China to dominate battery metal demand

• Demand trends for EV battery metals over the coming years have revealed that China will remain the key driver of direct metals demand
• Direct demand for nickel, cobalt and lithium will remain the strongest in China across both the core and bearish case scenarios over the coming years.

By: Molly Hancock

Fitch Solutions’ demand trends for EV battery metals over the coming years have revealed that China will remain the key driver of direct metals demand.

The analysis estimates that the indirect growth for cobalt, nickel and lithium will be the strongest across the EU under the bullish scenario, which is underpinned by favourable policy assumptions.

However, indirect growth for these three metals will lag behind across all scenarios in the United States, due to more restrictive EV policy assumptions based on poor support at the federal level.

Fitch Solutions has divided the geographic demands for battery metals into direct demand, which refers to demand from any country/region where battery manufacturing takes place domestically and indirect demand, which refers to demand from country/regions where EV sales make stoke demand for batteries containing key metals that are produced.

The direct demand for nickel, cobalt and lithium will remain the strongest in China across both the core and bearish case scenarios over the coming years.

The Chinese Government has set ambitious EV targets and we retain a positive outlook for China’s EV market as intensifying competition from major vehicle brands will drive down costs and improve choice.

Despite recent subsidy cuts announced in July 2019, price reductions among automakers and the rolling out of EV sales targets for vehicle manufacturers will continue to position the Chinese EV market as the most dynamic in the world.

While the demand growth for nickel, cobalt and lithium will spike in 2023-2025, Chinese carmakers’ strategies relating to EV production targets generally end in 2025, and EV sales growth and subsequent metals demand growth will begin to slow from 2025 onwards.

Fitch Solutions also revealed that due to the still-prevalent use of iron-heavy LFP batteries in China, a bullish case for EV sales and metals demand would lead to cumulative demand of 415,000 tonnes of iron from the country over 2019-2028 compared to just 145,000 tonnes in its bear case scenario.

Under Fitch Solutions’ bullish scenario, the EU will witness the fastest average growth in indirect demand for cobalt (25.8 per cent y-o-y), nickel (31 per cent y-o-y) and lithium (27.9 per cent y-o-y) up to 2028, ahead of China and the US.

According to Fitch Solutions, the reason for this is that EU EV sales team from a lower base in comparison to the US and China and as such the potential for growth is higher.

For example, according to Fitch Solutions’ Autos team estimates, EV sales will amount to over 370,000 units in 2019, compared to 458,000 in the US and 1.252 million in China.

Within its bullish, base and bearish case scenarios, Fitch Solutions forecast that the US indirect demand for cobalt, nickel and lithium to average slower annual growth than in China and the EU over 2019-2028, as a lack of supportive federal policy will pose obstacles to mass EV adoption in the country.

In February 2019, the Trump administration announced new standards that freeze emissions and fuel-efficiency requirements at the 2021 level, loosening previous higher targets and in contrasts to much stricter regulations implemented by California and adopted by 12 other states.

Its bullish case for the country assumes that future US government policy will take a favourable turn towards the EV market, in order to keep pace with rapidly developing EV segments in China and Europe.

The ongoing use of NCA batteries (containing nickel, cobalt and aluminium) by Tesla in the US market means that indirect aluminium demand will remain sustained in this market.

Cumulative indirect aluminium demand from the US EV market in our bullish scenario will amount to 9800 tonnes over 2019-2028, compared with to 3300 tonnes in China and 1300 tonnes in the EU.

Source: https://www.australianmining.com.au/news/china-to-dominate-battery-metal-demand/

Investment Highlights

• Kenbridge property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper
• 17.5 (21.8 fully diluted) percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property

Kenbridge Ni Project (ON, Canada)

• Advanced  stage  deposit  remains open  in  three  directions,  is  equipped with a 623m  deep  shaft  and  has  never  been  mined. 
• Preliminary  Economic Assessment completed and updated returned robust project 
  economics and operating costs including  a  NPV  of  C$253M  and  cash costs of US$3.47/lb of nickel net of  copper credits.
• Plans for Kenbridge include updating PEA, advancing the project through to feasibility and exploring the open mineralization at depth

FULL DISCLOSURE: Tartisan Nickel Corp. is an advertising client of AGORA Internet Relations Corp.