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Nickel's Perfect Storm: Western Supply Crunch Will Drive Gains
Recording date: 23rd May 2024
Nickel – lots of excitement over the past week since we saw each other in London last week to end up back at the same spot. Trading just over $20K per tonne, after climbing up to a high $21K level (nearly $10/lb) before falling back along with copper (which also hit all-time highs on LME of nearly $11K or $5/lb. LME inventories ticked up a couple of thousand tonnes during the week. After the fireworks of the last few weeks, expect nickel prices to settle into a range of $19-$20K (remember, $20K was the year-end forecast)
In China, a big surge in nickel prices didn’t translate into higher stainless or sulphate prices, so we saw discounts widen. We will see where we end up this week.
Geopolitically, there is still unrest in *New Caledonia*; French President Macron will visit to try to calm things down. Also, the Aussie resources minister does not sound too sympathetic to BHP – blaming their lack of investment as a primary driver of cost structure increase (remember BHP asking for help for their business) –
INSG bulletin came out – reporting March 2024 numbers – monthly deficit – only 2nd time in 2 years. YTD demand up 9%, YTD production up 7%
In company news - Tale of Three High-Grade Intervals:
Exciting results from Talon Metals and what they’re calling as CGO East Waterfall – analogous to something they found on West side Intercepts 4.81 meters at 4.89% Ni, 4.10% Cu, 0,06% Co, with notably high Platinum Group Elements ("PGEs"), averaging 17.45 g/t Pd+Pt+Au (9.26% NiEq);as well had second intercept of 79.22 meters at 0.80% NiEq;
For massive sulphide, we need traps for higher-grade stuff to “settle out”, it looks like it has a structure which has done that – it will be interesting to see what the scale looks like
On the Other hand:
NiCan released more results from Wine deposit drilling. Diamond drill hole Wine 24-4 intersected 20.3m, averaging 2.88% Cu and 2.14% Ni (2.85% NiEq), 0.09% Co, and 1.19g/t PGMs. I would be cautious about this one—all drilling looks in a less than 50x50 metre area—it's starting to look like a “Garibaldi.” We need to be able to start stepping out or finding analogues rather than drilling the same spot at different angles.
Power Nickel had another good CU-PGM with some nickel intersection PN-24-055 returned 15.40 m of 0.44 g/t Au, 22.04 g/t Ag, 5.06% Cu, 13.12 g/t Pd, 3.35 g/t Pt and .015% Ni including 5.05 m of 0.61 g/t Au, 50.29 g/t Ag, 13.27% Cu, 24.62 g/t Pd, 6.73 g/t Pt, and 0.33% Ni with 3.35 m of 0.70 g/t Au, 60.36 g/t Ag, 17.26% Cu, 25.02 g/t Pd, 3.61 g/t Pt and 0.37% Ni. Great results – now they need to define the extent of this lens to see how big it will be.
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Learn more: https://cruxinvestor.com/categories/commodities/nickel
Sign up for Crux Investor: https://cruxinvestor.com
View all episodes
By Crux InvestorRecording date: 23rd May 2024
Nickel – lots of excitement over the past week since we saw each other in London last week to end up back at the same spot. Trading just over $20K per tonne, after climbing up to a high $21K level (nearly $10/lb) before falling back along with copper (which also hit all-time highs on LME of nearly $11K or $5/lb. LME inventories ticked up a couple of thousand tonnes during the week. After the fireworks of the last few weeks, expect nickel prices to settle into a range of $19-$20K (remember, $20K was the year-end forecast)
In China, a big surge in nickel prices didn’t translate into higher stainless or sulphate prices, so we saw discounts widen. We will see where we end up this week.
Geopolitically, there is still unrest in *New Caledonia*; French President Macron will visit to try to calm things down. Also, the Aussie resources minister does not sound too sympathetic to BHP – blaming their lack of investment as a primary driver of cost structure increase (remember BHP asking for help for their business) –
INSG bulletin came out – reporting March 2024 numbers – monthly deficit – only 2nd time in 2 years. YTD demand up 9%, YTD production up 7%
In company news - Tale of Three High-Grade Intervals:
Exciting results from Talon Metals and what they’re calling as CGO East Waterfall – analogous to something they found on West side Intercepts 4.81 meters at 4.89% Ni, 4.10% Cu, 0,06% Co, with notably high Platinum Group Elements ("PGEs"), averaging 17.45 g/t Pd+Pt+Au (9.26% NiEq);as well had second intercept of 79.22 meters at 0.80% NiEq;
For massive sulphide, we need traps for higher-grade stuff to “settle out”, it looks like it has a structure which has done that – it will be interesting to see what the scale looks like
On the Other hand:
NiCan released more results from Wine deposit drilling. Diamond drill hole Wine 24-4 intersected 20.3m, averaging 2.88% Cu and 2.14% Ni (2.85% NiEq), 0.09% Co, and 1.19g/t PGMs. I would be cautious about this one—all drilling looks in a less than 50x50 metre area—it's starting to look like a “Garibaldi.” We need to be able to start stepping out or finding analogues rather than drilling the same spot at different angles.
Power Nickel had another good CU-PGM with some nickel intersection PN-24-055 returned 15.40 m of 0.44 g/t Au, 22.04 g/t Ag, 5.06% Cu, 13.12 g/t Pd, 3.35 g/t Pt and .015% Ni including 5.05 m of 0.61 g/t Au, 50.29 g/t Ag, 13.27% Cu, 24.62 g/t Pd, 6.73 g/t Pt, and 0.33% Ni with 3.35 m of 0.70 g/t Au, 60.36 g/t Ag, 17.26% Cu, 25.02 g/t Pd, 3.61 g/t Pt and 0.37% Ni. Great results – now they need to define the extent of this lens to see how big it will be.
—
Learn more: https://cruxinvestor.com/categories/commodities/nickel
Sign up for Crux Investor: https://cruxinvestor.com