Nickel - Bullish technically and fundamentally

[nioka]

56gsa,
Yes I'm bullish on a lot of things, nickel included.

My assessment of MCR is a little different to the figures quoted going forward. They have plans well under way to increase production beyond those shown by some analyists. The stats you show would not alone convince me to back MCR. I hope they are wrong going forward. I think they need updating.

 

[Temjin]

Remember that there is another way to invest in Nickel directly through etfsecurities.com on their ETFS offers. They also have one with a 100% leverage.

The latest 30% power supply drop in WA is going to have some sort of implication on almost ALL metal prices.

 

[renim]

MCR being one of the Kambalda boys, won't have significant JORC reserves. The nature of the 'dome' at Kambalda are lots of little nickel/gold deposits spread all over the area, with definite cut-off at depth (varies). As the orebodies meanders down, its not really economically justifiable to drill out more than a couple of years worth of production.
In short great historic production, but no surety of future production. The locals don't mind, they know the ore is there, but for analysts valuing a resource company using JORC reserves, well its kills the stock.
Thats possibly one reason why WMC left, they stopped being capable of operating small mines, which is all Kambalda will ever contain.
(Histoical note, by yr 2000, Kambalda had drilled more core than all of NSW)

Why MRE is low, i don't know.

I would be interested to know how Voisey bay etc are dealing with chindia growth.

ie will there be over supply, or over demand

i'm thinking about moving out of nickel, but if twiggy is into it, well i wouldn't want to bet against that.

 

[Mofra]

Not all anaysis of Nickel is bullish:

http://www.abareconomics.com/interactive/08ac_june/htm/nickel.htm

 

[michael_selway]

Not all anaysis of Nickel is bullish:

http://www.abareconomics.com/interactive/08ac_june/htm/nickel.htm

Hm WSA still looks pretty good

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS -4.5 23.1 51.0 132.1
DPS 0.0 9.0 26.4 52.5

Date: 20/8/2008
Author: Peter Wells
Source: The Australian Financial Review --- Page: 25
Some directors of Australian-listed companies were active in the sharemarket inmid-August 2008. Terry Streeter, the non-executive chairman of Western Areas,has acquired 875,000 shares in the mining company at a cost of $A6.59m.Likewise, ThinkSmart CEO Ned Montarello has paid $A1.64m for a parcel of sharesin the office equipment financing group. On the selling side, Just Groupchairman Ian Pollard has gained over $A240,000 after selling 109,452 of theretailer's shares to suitor Premier Investments

Western Areas on track for two new mines
12/09/2008 7:48:31 PM
Nickel miner Western Areas NL says it is on track to start up two new mines near its Flying Fox mine in Western Australia next year.

Managing director Julian Hanna told the company's annual general meeting in Perth that these developments, the Spotted Quoll and Diggers South mines, between Kalgoorlie and Esperance, would be underpinned by a recovered nickel price.

Mr Hanna said the nickel price, which was now about $US8.50 per pound (lb), would return to its usual level of between $US10 and $US15/lb soon due to its role in the production of stainless steel, which remained in high demand.

"We don't believe that it will remain below $US10 per pound for too long," Mr Hanna said.

"At $US8 per pound it is starting to knock out some of the producers around the globe ... but about $US15 per pound, it starts to be substituted in stainless steel with chromium, manganese and that sort of thing."

Western Areas aims to be the second largest producer of nickel in Australia, behind BHP Billiton Ltd, by 2011, producing 35,000 tonnes of nickel per annum from five mines.

The company reported a loss for 2007/08 of $54.9 million.

thx

MS

 

[pixel]

I didn't want to create a new thread, so I ran a Search for "nickel". This one will do.

I have been checking a few materials at the London Metals Exchange. While copper follows PMs down, the trend for nickel is looking more Bullish. At least from a Technical pov, there could be an inverted H&S pattern in the making.



One might also consider the Cup & Handle option, although that is generally considered a continuation pattern when it should sit at the top of an uptrend of sorts. See http://www.leavittbrothers.com/education/chart_patterns/cup_and_handle_bullish.cfm

 

[peter2]

Nickel has been slowly going higher over the last year and has had a good May18.
I've posted a few kitco charts so you can agree with me.

Aust nickel miners: should be going higher as well,
IGO WSA have kicked up this week
PAN, MCR are at/near new highs.

I've read reports (from nickel miners of course) that there might be a shortage in the next 12 months.

 

[Joules MM1]

....you can agree with me.

of course ! :

Electric cars use lithium-ion batteries, which contain high-grade nickel sulfate, to help keep a charge over longer distances. Lithium-ion batteries are in electric models from Tesla's high-end Model X to General Motors Co.'s (GM - Get Report) Chevrolet Bolt and Nissan Motors' (NSANF) Leaf.


But lithium-ion batteries exclusively use high-grade nickel, which is only about half of the world's supply of the metal. Among the biggest high-grade nickel producers in the high-grade market already facing supply constraints? Norilsk Nickel.


The problems could get worse from there, too. According to Glencore PLC (GLNCY) , there are about 40 kilograms of nickel in the average electric car battery pack. To keep up with booming demand for electric vehicles, nickel supply will have to grow 55% by 2030.


According to North America Nickel, electric car lithium-ion batteries of the future will rely even more on nickel than those today do. The typical battery makeup is expected to grow to nearly 80% nickel in 2020 from about 33.3% in 2017.


"Many of the factors that impact our manufacturing costs are beyond our control, such as potential increases in the costs of our materials and components, such as lithium, nickel, and other components of our battery cells or aluminum used to produce body panels," Tesla wrote in its most recent annual report. "If we are unable to continue to control and reduce our manufacturing costs,
https://www.thestreet.com/markets/c...ws-for-electric-carmakers-like-tesla-14561352

Wood Mackenzie estimates that nickel demand from the electric vehicle sector is going to grow from 40,000 tonnes in 2016 to 220,000 tonnes in 2025.
https://www.reuters.com/article/nic...electric-vehicle-buzz-andy-home-idUSL8N1N06DP

 

[So_Cynical]

Dam - i meant to watch MCR for the comeback, double bottom of around 14c gone.

 

[Wysiwyg]

NCM 811 = 8 parts Nickel, 1 part Cobalt, 1 part Manganese

 

[greggles]

Nickel at 6 month highs as a result of robust Chinese demand and expectations of a fourth consecutive year of supply deficit.

https://www.news.com.au/finance/bus...e/news-story/654c7b11e7f23470e243e7db5ec48081

 

[Ann]

Nickel stocks on the ASX: The Ultimate Guide

 

[sptrawler]

Nickel stocks on the ASX: The Ultimate Guide

The report is obviously a little old, panoramic sold off its Kambalda operations and are in the process of starting up the Savannah operation, it has hit a couple of hurdles.

https://thewest.com.au/business/min...h-on-troubled-savannah-ramp-up-ng-b881126948z

But generally, the report was very good, thanks for the post Ann.

 

[Padowan]

Reports out of Indonesia last night alluded to a nickel ore export ban brought forward by two years to December 2019, which caused a nickel price rally on the LME of +10%.

If the media reports are true I think if the forum monthly stock tipping competition was going for a few more days sptrawlers pick would have a even better chance of winning

 

[rederob]

Where came from, and where we are today:

2014's price peak looks like falling decisively as the past year's trend follows through.

 

[Ann]

After Elon Musk called for more nickel to be mined back in September...

Miners answer Musk call for more nickel

"Please mine more nickel," these four words from Tesla CEO Elon Musk reverberated across the global mining sector and raised awareness of how fundamental nickel is to the lithium-ion batteries powering hundreds of millions of electric vehicles to come off Tesla and traditional automaker assembly...

www.miningnewsnorth.com

The price has been doing well but with all the miners old and new out there with their spades and buckets digging away there may be a slight oversupply one may wonder?

I had a look at the forecast for nickel and it is suggesting there will be a falling away of the price.

"Nickel is expected to trade at 19696.98 USD/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 18341.49 in 12 months time."

 

[sptrawler]

The big problem the users of nickel have is, unless the price remains reasonable, the mines will go back on care and maintenance.
Nickel sulphate is a very high cost product to mine, it is found in hard rock areas and the yield per ton of ore is quite low. So as happened around 2013 a lot of the mines and processing plant is shut down and it isn't restarted unless there is strong possibility of the price holding up.
The demand for nickel isn't just increasing due to the onset of EVs IMO, it is also influenced by the use of stainless steel,

 

[Sean K]

After Elon Musk called for more nickel to be mined back in September...

Miners answer Musk call for more nickel

"Please mine more nickel," these four words from Tesla CEO Elon Musk reverberated across the global mining sector and raised awareness of how fundamental nickel is to the lithium-ion batteries powering hundreds of millions of electric vehicles to come off Tesla and traditional automaker assembly...

www.miningnewsnorth.com

The price has been doing well but with all the miners old and new out there with their spades and buckets digging away there may be a slight oversupply one may wonder?

I had a look at the forecast for nickel and it is suggesting there will be a falling away of the price.

"Nickel is expected to trade at 19696.98 USD/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 18341.49 in 12 months time."

Hopefully it stays over $7.50/lb what CTM used for their Scoping Study. Currently aiming to produce 341K tns over 13 years = $$$. And growing.

 

[sptrawler]

Hopefully it stays over $7.50/lb what CTM used for their Scoping Study. Currently aiming to produce 341K tns over 13 years = $$$. And growing.

If it stays around $US10/lb most Australian miners are very profitable, once it gets below $5/lb it is time to switch the lights off for most.
Well from memory those were the figures when I was working.

 

[mullokintyre]

I wan't sure whether to put this Nickel thread , the China thread, or the world is coming to an end thread.
But here it is.
From Zero Hedge

Around the time Peabody was served with a $534 million margin call on its hedging coal futures short, which it funded with a new $150MM unsecured (10%) revolver from Goldman Sachs, one of China's largest banks was also served with a margin call for hundreds of millions of dollars on a nickel short gone terribly bad after the price of Nickel did... well this:

However, unlike Peabody, a unit of China Construction Bank Corp - one of China's "Big Four" banks - was given additional time by the London Metal Exchange to pay hundreds of millions of dollars of margin calls it missed Monday amid an unprecedented spike in nickel prices. The reprieve from the LME - which just last week sent out thousands of erroneous margin calls on metals contracts - means that the unit, called CCBI Global Markets, is not formally in default, Bloomberg reported citing sources.

The details of the non-payments aren't quite clear: Bloomberg notes that the deferred default "isn’t necessarily an indicator of any problems at the parent company" although Bloomberg may be merely trying not to antagonize a major client. Instead, the media conglomerate suggests that the non-payment is more likely due to a failure by one of its metals-industry clients to make margin payments to CCBI Global Markets, which is a broker on the LME’s open-outcry trading floor. That in turn, left CCBI Global Markets struggling to arrange payment of the unusually large margin calls after the end of the business day in Asia, as nickel prices exploded throughout Monday.

As reported earlier, Monday’s monster squeeze was driven by market participants with short positions being forced to close out as they couldn’t meet margin calls.
But while a big Chinese bank may have had immunity, others may not be so lucky: Bloomberg previously reported that Chinese entrepreneur Xiang Guangda - known as “Big Shot” - had a large short position on the LME through his company, Tsingshan Holding Group, the world’s largest nickel and stainless steel producer. It's unclear whether that particular trader received a margin call and if he paid it.
And so, as we wait for more massively short squeezed names to emerge, we can't help but wonder if this is precisely the start of the "liquidity crisis" predicted by Zoltan Pozsar; after all, he has called virtually everything else spot on so far...

Nothing I like better is to short squeeze on the parasitic shorters.
Got my popcorn, a fine selection of reds, and a comfy chair.
Mick