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NIC - Nickel Industries

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waterbottle said:
Seems to me like NIC is in trouble. A majority holder wants low nickel prices and now is on a losing trade
Click to expand...
From the article, the short hedge position was based on faulty assumptions and forecasting. Predicting lower nickel prices by taking a short hedge position as a producer is a bit different to wanting low prices due to speculation. The fact though that one market participant has so much influence is a concern, however...

"If it can weather the current storm, Tsingshan – which recorded more than $40 billion in annual revenue over the past two years – should be a prime beneficiary of higher nickel prices as the world’s top producer. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze."
 
So market disclosure out today reveals Baillie Gifford & Co to be the major seller on Wednesday. Meanwhile director Weifeng Huang just bought another 295,000 shares of NIC.
 
NIC was under TH, market rumour, denial, share price slumped, I for the first time did a day trade and took my cash by buying just before TH was announced and selling them but it looks a bad sign now with the SPP withdrawn on 11 March (I was shortsighted to follow the news)
LME SUSPENDED nickel trade

LME Suspension May Prove Timely for Nickel Mines - Sharecafe

No trading in nickel on the LME for at least part of this week should be good news for Nickel Mines after its shares lost 25% last week in the wake of the problems involving Tsingshan.
www.sharecafe.com.au
https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4 (WHY THEY SOLD OFF??? Any connection with the short seller Tsingshan or Russian connection as a major investor as Russia has been the biggest exporter of Nickel also ??)


This chart shows so much of blood shed and in the mean time a director bought shares worth $393,000 - does he know something market does not even see or was he connected as a part of the short seller ?



NIC Withdraws Share Purchase Plan (NIC.ASX)
L1: NIC has announced that the Share Purchase Plan has been withdrawn effective immediately. The Board of Directors has decided that it is in the best interests of shareholders to cancel the Share Purchase Plan due to market volatility and the retraction in the company’s share price in recent days, with NIC’s share price currently at a 10.9% discount to share price determined under the SPP.
Summary
  • NIC has announced the withdrawal of the SPP which was announced on 16 February 2022. All application money will be refunded on or around 16 March 2022.
  • The purpose of the Share Purchase Plan was to allow shareholders to participate in capital raising announced 9 February on the same terms as participants in Institutional Placement and the Conditional Placement to Shanghai Decent (or its nominee).
  • The share price was determined at $1.37 under the SPP.
  • Applications for the Share Purchase Plan had far exceeded the target amount of $18m, with applications received totalling approximately $57m.
  • NIC’s Board of Directors has decided that it is in the best interests of shareholders to cancel the Share Purchase Plan due to market volatility and the retraction in the company’s share price in recent days.
  • The $18m+ that NIC passed on isn’t required for NIC to be able to complete the acquisition of an initial 30% stake in the Oracle Nickel Project.
Kind regards,
Julius Zondag
Senior Research Analyst, Maqro Capital


 
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Interesting article in the AFR on the Tsingshan short hedge debacle...

Tsingshan debacle exposes weak underbelly of LME​

"As Bloomberg noted, “based on that figure, the tycoon’s company, Tsingshan Holding Group Co, would have owed JPMorgan about $US1 billion in margin on Monday. The nickel producer has been struggling to pay margin calls to its banks and brokers.”

According to the Bloomberg report, “Tsingshan’s difficulties paying its margin calls have put its banks and brokers in a bind, as they have had to make hefty margin calls of their own at the LME to cover their short positions on the exchange. If Tsingshan walks away from its commitments, the banks stand to lose billions of dollars.” ...

But there appears to be a sticking point in the talks. Both the LME and Chinese officials want Tsingshan to pay its brokers and exit its position, allowing the market to reopen in an orderly fashion.

Tsingshan’s bridging loans, however, give it the ability to meet margin calls when the market reopens.

Xiang is obviously calculating that the situation can be resolved without losses, either for Tsingshan or its banks. That’s because if the Chinese nickel giant can find a way through its present difficulties, it will ultimately benefit from higher prices.

What’s more, if Xiang holds on to his short position, as he has told his banks he wants to, and nickel prices go down once the LME reopens, the amount of money he owes his banks and brokers would also drop sharply.

Still, the Tsingshan episode has raised serious questions about the huge systemic risk lurking on commodity exchanges.

One issue is the lack of transparency, and the lack of disclosure regarding off-exchange positions.

Tsingshan, for instance, has a short position of 30,000 tonnes of nickel directly on the LME, which is held through brokers.

But the bulk of its 150,000-tonne short-position has been accumulated through bilateral deals with banks. Companies prefer these “over-the-counter” positions because there are less onerous reporting requirements. The banks then offset their risk by selling futures contracts on the LME.

But there are also big questions about whether clearing houses such as the LME are adequately capitalised given their potentially huge systemic risk."
 
Here is another article that explains the LME nickel situation quite well.

Nickel, the devil’s metal with a history of bad behaviour

The global nickel market is in a pricing black-out, writes Andy Home.
www.mining.com

And nickel has delivery issues which are all its own.

“Part of the problem, critics say, is linked to the structure of the contract,” Clow wrote in 1992, explaining, “only a minority of the nickel produced every year is deliverable against the LME contract (…) LME stocks represent only a small percentage of worldwide production.”

That is as true today as it was back then.

Only Class I nickel, defined as nickel with greater than 99.8% purity, is deliverable against the LME contract.

Nickel comes in multiple forms and guises – nickel pig iron, nickel matte, ferronickel, nickel sulphate – all of which need to be price-hedged on the LME but none of which can be delivered.

Indonesia, the world’s driver of primary production growth, doesn’t produce nickel in Class I form.

Tsingshan, the Chinese company at the epicentre of the current storm, has massive nickel capacity in Indonesia but its metal is either flowing directly into its stainless steel meltshops or being converted into intermediate products for shipment to Chinese battery makers. None of it is Class 1.

Whatever the mix of price hedging and speculative overlay in the company’s positioning, the short play ultimately had no physical delivery escape path.

Others may have fallen through the same price-delivery gap. The LME’s latest positioning report shows four significant short-position holders on the main March prompt date. If those are hedges against anything other than Class I, the owners are in the same pickle.

Nickel’s deliverability issue has dogged the LME contract since launch. There was intense industry discussion in the 1990s about the disconnect between exchange and supply-chain pricing.

But finding good-delivery criteria for a highly variable product such as ferronickel, which can grade between 20% and 40% with a wide spectrum of iron content, proved impossible.

The stainless steel sector, historically the largest user of nickel, evolved a surcharge system to try and mitigate and pass through nickel’s price volatility, but at the occasional cost of generating an echo-effect in the stainless stocking cycle.

Nickel sulphate, a fast-growing process stream which is destined for battery makers but is also not exchange deliverable, opens up another potential rift in the pricing landscape.

The London Metal Exchange is facing a lot of pressure to think harder about how it manages markets such as nickel after this week’s chaos.

But the nickel market also needs to think a lot harder about how it wants to handle its pricing risk.
 
From a 50% paper profit to a real 10% profit in a few days.
I don’t think I have taken a hit like that before.
When the dust settles which I believe it has and the market has previously valued NIC at this current level does it warrant an entry, the question is to myself.
Will look to enter again tomorrow after some thought.
 
Back in, my worry was that NIC could have sunk below a dollar with a rumored sell off by Tsingshan.
The stabilizers have held it steady and looks like it’s full steam ahead again.
Can’t see why it won’t gradually build back up to previous highs
 
On June 3rd, 2022, Nickel Mines Limited changed its name to Nickel Industries Limited.
 
Understandable reaction to the news.




I've transferred my nickel position to MCR.
 
peter2 said:
Understandable reaction to the news.

View attachment 146466
View attachment 146467

I've transferred my nickel position to MCR.
Click to expand...
@peter2
I wished to have subscribed to the NIC thread earlier and read your comments.
Now NCI is bragging on Indonesian investment and pitching the CR.
The market price is almost same as the CR price. Probably the underwriter will do some magic to lift the price to attract full subscription of the CR.
Any comments on its current scenario since you posted in sep 22?
Do hold and debating if I sell and buy CR just sell take cash , or do nothing.
Any comments from the holders and nickel gurus.
 
NIC is my selection for the April 2023 competition

i hold a small number of NIC ( roughly break-even ) a fairly recent buy ( earlier this month )

if'n she rises i get two greens in a row this year

if it slides i will consider adding some more cheap

it makes a profit ( and pays a div. ) some years and operates outside Australia helping me to diversify geo-politically

the large major holder might reduce the risk of a take-over .. a current hazard with Australian-based nickel projects

has had some issues in the past , are such things behind the company
 
Good luck.
With top management being replaced could show some positive result
 
Miner said:
Good luck.
With top management being replaced could show some positive result
Click to expand...
well PAN has been a disappointment , WSA a crystallized loss , MCR will be a winner ( take-over or not ) , NIC doesn't have to do much extra to be an important nickel exposure for me

will be watching costs at NIC , that could be a winning edge
 
NIC should have travelled well after commissioning news but as usual market does not align with my thoughts
 

Attachments

  • Oracle-Nickel-Power-Plant-Commences-Commissioning.PDF
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NIC is my tip for this month's (August ) competition , at the risk of breaking my perfect record ... of avoiding the wooden spoon at ASF

i am selecting NIC which i believe will face downward pressure in the coming month .. hopefully sub 78 cents where i hope to add extra

conversely Bell Potter paints a very rosy picture over the coming 12 months with a target price of $1.75 and the ability to maintain the 4 cents div. ( by increasing the payout ratio ) , i see production cost fears influencing the share price along with global recession worries short term , but i am thinking 5 to 10 years this is worth my cash

good luck
 
@divs4ever, @peter2, @DrBourse, @Dona Ferentes , @Skate and followers of NIC.
How is your analysis stacking with the current and near future for NIC?
The company managed to have a CR and PP @$1.02 with the latest price being less than 80 cents. Those who paid such a massive premium are expecting something but probably feeling sour when unsecured note holders are getting 11.5% return.
Sales increased but profits went south.
FID is due in the September quarter after FS completion would probably give another jolt to the market that does not like capital investment especially since nickel is not looking good anymore.
Silver line on nickel front is the haulage road completion meaning more ore to be passed over however.
Interested to hear back from you




 
Hi Miner.....

Don’t know much about the Nickel Industry in general - Always tried to avoid it….
Pure Nickel Plays & Penny Dreads have always been at the top of my Hate List….
Both have a history of No Credible Financials, and both are usually Ramped to the Hilt….

The NIC Story so far:-
Just reading back on the posts here in the ASF “NIC – Nickel Industries” Forum, all I see are, what I call “Hope Posts”. …..Most of the posts show the SP as Flat or Dropping, & the Posts usually suggest HOPE for the future…. Sometimes there is a ST Uptrend, then the Analysts Hope Posts really Ramp Up….

At one stage it peaked at $1.79 on 8/3/22, and has been in freefall ever since…..

The Chart below shows that if NIC had been a goer from day 1 in July 2018, it should, today be about $1.50…. - but after its peak on 8/3/22 @ $1.79, punters realised there was too much Political & Foreign Interference, and substantial Shorting….





The Current Story:-
It’s the sort of stock that is easy to trade, but, ST ONLY…..

Current FA follows:-
NIC just sneaks into the OK Financials Group, But, it has always been Ramped to Death, in its past life as NML, and now in its current rebirth as NIC….
Unaudited & Conservatively Structured Balance Sheets are a worry….. Usually Rigged….
Balance Sheets are meant 2 B Precise & Exact, NOT Conservatively Structured….
Are NIC expecting +-ve or -ive "Significant Flexability" ??????????





Current TA follows:-


Like any PD, NIC’s TA is not much use to anyone except the ST Trader ATM – the only ST TA +ives are that it’s continuing in the same predictable direction…..

So everyone will need to rely on Ramping & The Analyst & Broker issues of Sheep Bait….

The Devils Metal is now Closer to where it belongs IMO…. NIC’s Historical Low is $0.21c…..
As everyone knows we should only deal in Facts, Not too many Facts on NIC ATM, so I'm very cautious....

Cheers...
DrB.
 
i expect more downturn in the short/mid term , primarily because it sells/nickel-iron products as decreed by Indonesia as the government decided the ore must be 'value added to' in Indonesia ( something Australia should have considered years back ) as the global economy slows

however in a slowing market this MIGHT give NIC time to grow sensibly , not push for a sequence of production records

i am willing to buy extra ( CAREFULLY ) as the share price slides lower

things to watch are who NIC is selling to and in which currency , Indonesia may move closer to the SCO ( kind of the minor league of BRICS )

NIC is building plant and infrastructure so is trying to grow organically , Aussie shareholders will have to navigate worries over FX

am not excepting this to be exciting ( in a good way ) in the next three years , but my Aussie nickel plays either turned into duds ( like PAN ) or were taken over

would the Government permit NIC to be taken-over by a foreigner , that would be the only major upset for me ( that i can foresee )
 
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