Falling nickel prices hitting higher cost producers
After a good 2022, nickel prices are now feeling the pressure of rising Indonesian production and generally soft economic conditions. Although nickel equities don’t appear expensive for the long-term, shares are now fighting a headwind of lower prices and margins are compressed enough that several would be in difficultly should prices weaken another 10-20%. David Radclyffe’s views are mostly negative to neutral, his preferred nickel equities are IGO and Sherritt, while he has SELL ratings on Vale Indonesia, Norilsk Nickel and Nickel Industries.
Edition: 166
- 04 August, 2023
Nickel’s price isn’t quite right
Tony Robson’s latest report explains that the price of nickel is not fully supported by the fundamentals. It is true that demand growth rates have been strong, but so has the surge in production from Indonesia, which will grow from 150kt in 2015 to 1,330kt in 2025. Positively, Tony expects EV’s to account for 21% of global demand in 2025 (from 2% in 2015). The best listed exposure globally to Indonesian growth is through BUY-rated Nickel Mines, while HOLD-rated Norilsk Nickel has the best dividend yield.
Edition: 114
- 09 July, 2021