Recording date: 14th March 2024

Nickel broke through $18,000 level surging up to $18,500 – 16% off the lows from a month ago when nickel was “going to be bad forever…”. It has given up some of those gains but it's still trading at $18,100 or $8.20 per pound. When you have a big short or big long position, when people covering can see a sharp price move (gone from 24,000 lots net short to 8,000 net short in just over a month).

We’ve seen, as expected, follow-through battery restocking in the market – Chinese nickel sulphate prices up 3% in one week. Chinese stainless prices have come off a little bit and are showing some weakness (got a bit ahead of itself), but stainless markets in Europe have seen prices improve and scrap discounts have narrowed meaningfully in both the US and Europe after troughing last summer.

EV sales globally were also “going to be bad forever” – no wait a minute, up 32 % YTD February according to Rho Motion

+32% globally (1.5M – 1.9M)
+34% in China
+33% in the US & Canada
+21% in the EU & EFTA & UK

Indonesia
In addition to restocking in the battery sector, a big driver of price support is limits on Indonesian ore supply – reports say that the Indonesian government are limiting the amount of ore supply for this year. An editorial in Jakarta Post – the main English language paper in Indonesia, suggested the following:

‘The idea to establish an OPEC-style organization for nickel was once introduced by President Joko “Jokowi” Widodo and Investment Minister Bahlil Lahadalia. Such an organization could help producing countries better coordinate supply and prices. Perhaps it is a good time to carry on with the plan.’

Why would you want to be in a metal where the supply will be dominated by larger players to keep supply in line? An Indonesian minister was quoted saying that they want to keep prices at $18,000 level (I'm sure they would be quite happy if prices sat 10-15% higher in $20-$21K level). I don’t think they’ll be able to keep pace with demand growth later this decade.

BHP issue (picking on them again) is that they own a bunch of 3rd/4th quartile cost curve assets that are very old and the only new supply they have is in probably the most expensive jurisdiction (Western Australia) in the world ….

Back to some company news:

Widgie Nickel released scoping study to produce 10ktpa of nickel for 6 years with extension potential. Capex of $269 million, 22% IRR, $400 million NPV at $24,000 nickel price. Cash cost of $5.36 per pound.

Premium Nickel (PNRL) released 5 additional holes Highlights include:

SNUG-23-017 (drilled 180 metres down plunge and outside of the South Limb historic resource): 18.15 metres of 2.25% NiEq (1.27% Ni; 1.65% Cu; 0.06% Co) incl. 6.25 metres of 3.28% NiEq (2.34% Ni; 1.40% Cu; 0.11% Co) and 3.50 metres of 3.31% NiEq (1.06% Ni; 4.08% Cu; 0.05% Co)

SNUG-24-089: Drilled 403 metres down-plunge and outside of the South Limb historic resource intersected massive sulphide mineralization (assays pending).

Queensland Pacific Metals - Korean news reported QPM announced a 3-year delay to supply nickel to POSCO/LGES to end 2026 at the earliest.

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