Five times the amount of nickel will be needed to meet global demand by 2050. Don’t miss out on investing in a metal that is crucial to the EV revolution!
The Investing News Network spoke with analysts, market watchers and insiders to get the scoop on the trends and stocks that you need to watch to stay ahead of the markets in 2024.
Table of Contents:
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A Sneak Peek At What The Insiders Are Saying
“Global nickel consumption is expected to increase due to recovery of the stainless steel sector and increased usage of nickel in EV batteries. Batteries now account for almost 17 percent of total nickel demand, behind stainless steel.”
— Ewa Manthey, ING
“While LME nickel prices are expected to find support from a weaker US dollar in 2024 as the Federal Reserve eases monetary policy, we expect prices to remain subdued as further primary nickel output growth from Indonesia and China keeps the market in a surplus for the third consecutive year.”
— Jason Sappor, S&P Global Commodity Insights.
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Nickel and the Battery Boom in 2024
Nickel Price 2023 Year-End Review
Nickel soared to its highest price ever in 2022, breaking through US$100,000 per metric ton (MT).
2023 was a different story. As governments worked to combat inflation and investors faced considerable uncertainty, commodities saw a great deal of volatility. Nickel was no exception, especially in the first half of the year.
Ultimately the base metal couldn’t hold onto 2022’s momentum and has spent the last 12 months trending downward. Read on to learn what trends impacted the nickel sector in 2023, moving supply, demand and pricing.
How did nickel perform in 2023?
Nickel price from January 2, 2023, to December 29, 2023.
Chart via Trading Economics.
Nickel opened 2023 at US$31,238.53 on January 2, riding on the back of momentum that started in Q4 2022, and flirted with the US$31,000 mark again on January 30. As January closed, the metal began to retreat, and by March 22 nickel had reached a quarterly low of US$22,499.53. It made slight gains in April and May, but spent the rest of the year in decline, reaching a yearly low of US$15,843 on November 26. In the final month of the year, the nickel price largely fluctuated between US$16,000 and US$17,000 before closing the year at US$16,375, much lower than where it started.
Despite nickel’s return to normal price levels, 2022’s rise to more than US$100,000 made more headlines this past year. The substantial increase came after a short squeeze, and the London Metal Exchange (LME) was criticized by some market participants for halting trading and canceling US$12 billion in contracts.
In June 2023, Jane Street Global Trading and hedge fund Elliott Associates filed a lawsuit for US$472 million in compensation for the canceled trades, stating that the LME acted unlawfully. However, judgment came down in favor of the LME on November 29. Elliott Associates has been granted permission to appeal the decision, which it intends to do.
Indonesian supply growth weighs on nickel price
At the end of 2022, analysts were predicting that nickel would enter oversupply territory due to increased production, primarily from Indonesia and China. Speaking to the Investing News Network (INN) at the time, Ewa Manthy of ING commented, “We believe rising output in Indonesia will pressure nickel prices next year.”
This prediction came true — production surpluses continued to be a theme in 2023, weighing on prices.
Indonesia continued its aggressive increase in nickel production, more than doubling the 771,000 MT it produced in 2020. A forecast from an Indonesian government official in early December indicates the country is on track to reach production in the 1.65 million to 1.75 million MT range, further adding to a growing supply glut.
In an email to INN, Jason Sappor of S&P Global Commodity Insights said nickel was the worst-performing metal in 2023 due to expanding supply. “We consequently expect the global primary nickel market surplus to expand to 221,000 MT in 2023. This would be the largest global primary nickel market surplus in 10 years, according to our estimates,” he said.
The reason for Indonesia’s higher output in recent years is that the country has been working to gain greater value through the production chain, and in 2020 strictly regulated export of raw nickel ore. This decision forced refining and smelting initiatives in the country to ramp up rapidly and brought in foreign investment.
In H2, Indonesia’s attempts to combat illegal mining led to delays in its mining output quota application system. While the country originally said it would begin to process applications again in 2024, lack of supply forced steel producers to purchase nickel ore from the Philippines to meet demand, and Indonesia ultimately issued temporary quotas for Q4.
Nickel demand hampered by weak Chinese recovery
Supply is only part of the problem for nickel. Coming into 2023, Manthy suggested demand would be impacted by China’s zero-COVID policy, which had been affecting the country’s real estate sector. “China’s relaxation of its COVID policy would have a significant effect on the steel market, and by extension on the nickel market,” she said.
This idea was echoed by analysts at FocusEconomics, who noted, “The resilience of the Chinese economy and the country’s handling of new COVID-19 outbreaks are key factors to watch.”
While China ended its zero-COVID policy in December 2022, the year that followed was less than ideal for the country, with sharp declines in real estate sales and two major developers seeing continued troubles. In August, China Evergrande Group (HKEX:3333) filed for bankruptcy in the US, and at the end of October, Country Garden Holdings (OTC Pink:CTRYF,HKEX:2007) defaulted on its debt. Because the Chinese real estate sector is a major driver of steel demand, this has had a dramatic impact on nickel and is one of the primary causes for its price retreat.
There have also been wider implications for the Chinese economy. Deflation has been triggered in the country as its outsized property sector implodes, with downstream effects for the more than 50 million people employed in the construction industry. Some, including the International Monetary Fund and Japanese officials, have compared the situation in China to Japan in the 1990s, when that country’s housing bubble burst and created economic turmoil.
With uncertainty rife, China’s central bank still isn’t ready to begin cuts on its key five year loan prime interest rate, but it has been working to improve market liquidity to stimulate real estate sector growth. In aid of that, it cut the reserve requirement ratio by 25 basis points twice in 2023, lowering the amount of cash reserves banks have to keep on hand.
So far, these stimulus efforts haven’t had much effect on the real estate market, and its continued struggles have ensured that commodities attached to the sector, including nickel, are still trading at depressed prices. China has vowed to continue to work on its fiscal policy by removing purchasing restrictions on home buying and providing better access to funding for real estate developers.
EVs not boosting nickel price just yet
Nickel is one of many metals that has been labeled as critical to the transition to a low-carbon future. It’s essential as a cathode in the production of electric vehicle (EV) batteries, and when INN spoke to Rodney Hooper of RK Equity at the end of 2022, he noted that people were initially quite conservative on their estimates of EV sales.
However, that’s now begun to change. “That’s all turned on its head now. EVs represent a big percentage of nickel demand, and they will continue to rise going forward,” Hooper explained at the time.
While the EV outlook remains bright, the sector hasn’t grown fast enough to make up for declining steel sector demand for nickel. And with limited charging infrastructure, range concerns and the effects of higher-for-longer interest rates, EV sales slowed in 2023. The slowdown is welcome news for battery makers as it will allow them time to build out factories and further develop technology, but it’s not good for investors and producers of nickel looking for pricing gains.
Investor takeaway
2023 wasn’t a great year for nickel. It faced increasing supply against lowered demand from both the Chinese real estate sector and slower EV sales. The rebound in the Chinese economy that was hoped for after COVID-19 restrictions were removed never occurred, and instead it has regressed further, pushing into deflationary territory.
Nickel investors may feel a little stung at the close of the year, especially as uncertainty in the market persists.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Nickel stocks investing — FREE
Nickel Price Forecast: Top Trends That Will Impact Nickel in 2024
Nickel started 2023 high after a rally at the end of 2022, but supply and demand pressures saw the base metal’s price decline throughout the year to close nearly 50 percent lower at US$16,375 per metric ton (MT).
Production has increased rapidly in recent years, and oversupply played a big role in nickel’s 2023 price dynamics. Indonesia in particular has ramped up its output and now accounts for more than 50 percent of global nickel supply.
Excess supply was compounded by weak demand out of China, which has continued to struggle since ending its zero-COVID policy in January. China’s central bank is now working to stimulate the economy to prevent runaway deflation.
What does 2024 have in store for nickel? The Investing News Network (INN) spoke to experts about what could happen to the metal in the next year in terms of supply, demand and price. Read on to learn their thoughts.
Experts call for another nickel surplus in 2024
Nickel is coming into the year with a holdover surplus from 2023. This glut has mainly come from an increase in Class 2, lower-purity nickel produced in Indonesia, but it’s also been driven by an increase in the production of Class 1, higher-purity product from China. The former category, which includes nickel pig iron and ferronickel, is used in products such as steel, while the latter is necessary to create nickel sulfate and nickel cathodes for electric vehicles (EVs).
Against that backdrop of higher supply, both nickel products have also faced decreased demand.
The resulting oversupply concerns have been reflected in core metals markets, and Ewa Manthey, commodities strategist at ING, told INN that nickel has the largest short position of the six London Metal Exchange (LME) base metals.
“This buildup is making nickel vulnerable to violent price spikes should inventors unwind their short positions,” she said. This type of situation occurred in 2022, when the nickel price catapulted rapidly to over US$100,000 before the exchange canceled billions of dollars in trades and suspended nickel trading. The LME’s approach to the situation has been criticized, but was recently ruled lawful by London’s High Court of Justice.
The International Nickel Study Group (INSG), an intergovernmental body consisting of government and industry representatives, met in October to discuss the current state and outlook for the nickel market.
At the time, the group forecast that surplus conditions would continue into 2024, with oversupply reaching 239,000 MT on the back of increases in nickel pig iron output from Indonesia. Meanwhile, decreases in nickel pig iron production from China are expected to be offset by increases in nickel cathode and nickel sulfate production.
Even though the INSG expects demand to grow from 3.195 million MT in 2023 to 3.474 million MT in 2024, production is still anticipated to be higher, rising from from 3.417 million MT in 2023 to 3.713 million MT in 2024.
Chinese recovery needed to buoy nickel price
At the outset of 2023, experts thought Chinese demand for nickel would increase as the country ended its strict zero-COVID policy. China’s construction industry is a key consumer of nickel, which is used to make stainless steel.
However, the recovery was slower than predicted, and demand from the real estate sector never materialized.
“China’s flagging recovery following COVID lockdowns has hurt the country’s construction sector and has weighed on demand for nickel this year,” Manthey explained to INN.
While the lack of recovery in China’s real estate sector negatively impacted nickel demand and pricing through 2023, according to Fitch Ratings’ China Property Developers Outlook 2024, the country has been targeting construction and development policy in higher-tier cities and injecting liquidity in the market. This has largely been a balancing act as it tries to stem deflation in its market and battles with inflation globally.
If China’s efforts to provide real estate sector support are successful that could be a boon for the nickel price. But as 2024 begins, more economists are forecasting a continued downtrend in the Chinese economy.
Even so, the INSG’s October forecast indicated that demand for stainless steel was set to grow in the second half of 2023, and the group was calling for further growth in 2024.
EV demand for nickel rising slowly but surely
While the Chinese real estate market is a key factor in nickel demand, it’s not the only one.
The expanding EV sector is also a growing purchaser of nickel. “Global nickel consumption is expected to increase due to recovery of the stainless steel sector and increased usage of nickel in EV batteries,” Manthey said. “Batteries now account for almost 17 percent of total nickel demand, behind stainless steel.”
As a cathode material in EV batteries, nickel has become a critical component in the transition away from fossil fuels, which the expert anticipates will help its price in the future.
“The metal’s appeal to investors as a key green metal will support higher prices in the longer term,” she said.
While demand for battery-grade nickel is predicted to grow over the next few years as the metal is used in the prolific nickel-manganese-cobalt (NMC) cathodes, manufacturers and scientists have been working to find alternatives that don’t rely on nickel and cobalt due to environmental and human rights concerns, as well as the high costs of these cathodes.
Lithium-iron-phosphate (LFP) batteries have become a contender in recent years, growing in popularity in Asia and seeing uptake from major EV producers like Tesla (NASDAQ:TSLA), owing to their longer lifespans and lower production costs. However, because of their lower range, LFP batteries have low demand in regions such as North America, where the ability to drive long distances is an important factor in purchase decisions.
This means that for now, NMC batteries will remain an essential part of the EV landscape.
EV demand has also declined recently as the industry faces headwinds that have soured consumer interest, including charging infrastructure shortfalls, inconsistent supply chains and elevated interest rates. These factors are already starting to have an impact, with Ford (NYSE:F) and GM (NYSE:GM), among others, cutting production forecasts for 2024.
What will happen to the nickel price in 2024?
Following its near 50 percent drop in 2023, the nickel price is expected to be rangebound for most of 2024.
“While LME nickel prices are expected to find support from a weaker US dollar in 2024 as the Fed eases monetary policy, we expect prices to remain subdued next year as further primary nickel output growth from Indonesia and China keeps the market in a surplus for the third consecutive year,” said Jason Sappor of S&P Global Commodity Insights.
Manthey agreed that the price is likely to stay flat. “We see prices averaging US$16,600 in Q1, with prices gradually moving up to average US$17,000. We forecast an average of US$16,813 in 2024,” she said. Manthey also noted that nickel is set to remain elevated compared to average levels before the short squeeze in March 2022.
Sappor suggested that the nickel surplus and the metal’s rangebound price may prompt producers to reduce their output. “Nickel prices have sunk deeper into the global production cost curve, raising the possibility that the market could be hit by price-supportive mine supply curtailments,” he said.
At this time there is no indication that producers will ease production next year, and Vale (NYSE:VALE), one of the world’s top nickel miners, is expecting its Indonesian subsidiary to produce slightly more versus 2023.
Investor takeaway
Much like the rest of the mining industry, nickel is being affected by broad macroeconomic forces in the post-COVID era. Higher interest rates are stymying investment across the mining industry, while also lowering demand for big-ticket items like real estate and cars, which help to drive demand for metals.
For nickel, this means another year of oversupply. A potential rebound in the Chinese real estate market and increased demand from upfront tax credits for EVs could shift its trajectory, but the headwinds in 2024 look to be strong.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Blackstone Minerals, Falcon Gold and FPX Nickel are clients of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Nickel stocks investing — FREE
Top 5 Canadian Nickel Stocks of 2024
Nickel has been trending down since early 2023, and bearish sentiment still pervades the market in 2024. Supply is expected to outflank demand over the short term, but the longer-term outlook for the metal is strong.
The Investing News Network (INN) spoke to analysts to get their thoughts on the biggest nickel trends to watch for in 2024, and what they think will affect the market moving forward. They discussed factors such as oversupply, weaker-than-expected demand from China and doubts about the London Metal Exchange after it suspended trading last year.
Demand from the electric vehicle industry is one reason nickel’s future looks bright further into the future.
“Global nickel consumption is expected to increase due to recovery of the stainless steel sector and increased usage of nickel in electric vehicle batteries. Batteries now account for almost 17 percent of total nickel demand, behind stainless steel,” Ewa Manthey, commodities strategist at financial services firm ING, told INN in the lead-up to 2024. “The metal’s appeal to investors as a key green metal will support higher prices in the longer term.”
Below INN has listed the top nickel stocks on the TSX, TSXV and CSE by share price performance so far this year. All year-to-date and share price data was obtained on February 22, 2024, using TradingView’s stock screener. The top nickel stocks listed had market caps above C$10 million at that time.
1. EV Nickel (TSXV:EVNI)
Year-to-date gain: 96.67 percent; market cap: C$53.03 million; current share price: C$0.59
EV Nickel’s primary project is the 30,000 hectare Shaw Dome asset in Ontario. It includes the high-grade W4 deposit, which has a resource of 2 million metric tons at 0.98 percent nickel for 43.3 million pounds of Class 1 nickel across the measured, indicated and inferred categories. Shaw Dome also holds the large-scale CarLang A zone, which has a resource of 1 billion metric tons at 0.24 percent nickel for 5.3 billion pounds of Class 1 nickel across indicated and inferred categories.
EV Nickel is also working on integrating carbon capture and storage technology for large-scale clean nickel production, with majority funding from the Canadian government and Ontario’s provincial government. In late 2023, the company announced it was moving its carbon capture research and development to the pilot plant stage.
The Canadian nickel exploration company’s share price started off the year at C$0.30 before steadily climbing to reach a year-to-date high of C$0.69 on February 12.
Press Releases
Company Profile
2. Fathom Nickel (CSE:FNI)
Year-to-date gain: 34.78 percent; market cap: C$19.53 million; current share price: C$0.115
Exploration-stage Fathom Nickel says its mission is to target magmatic nickel sulfide discoveries to support the global electric vehicle market. The company’s Saskatchewan-focused portfolio includes the Albert Lake project, which holds nickel, copper and platinum-group metals (PGMs), and the Gochager Lake nickel-copper project. The 90,000 hectare Albert Lake project hosts the historic and past-producing Rottenstone deposit.
Fathom kicked off its winter exploration program at Albert Lake during the first week of February. According to the company, the first hole will target a “very strong, very prominent conductor dominating the northeastern section of the figure.” Fathom will also aim to further test and potentially find the source of a multi-element soil geochemical anomaly at the Tremblay-Olson claims area. It plans to complete five to seven drill holes to that end.
The company’s share price has moved from C$0.12 at the start of the year to a year-to-date high of C$0.21.
Company Profile
3. Sama Resources (TSXV:SME)
Year-to-date gain: 20 percent; market cap: C$25.31 million; current share price: C$0.12
Sama Resources’ focus is on the Samapleu nickel-copper-PGMs project in Côte d’Ivoire, West Africa, which includes the Samapleu and Grata deposits. Samapleu is a joint venture between Sama (70 percent) and Ivanhoe Electric (30 percent); Ivanhoe Electric has the option to purchase up to a 60 percent interest in the project.
In the first few weeks of the year, Sama has already dropped a few press releases. The company shared highlights from its ongoing 3,800 meter winter drilling program at the Yepleu prospect. Importantly, the work has confirmed that newly discovered nickel-copper-PGMs mineralization measures 500 by 400 meters, is near surface and open in all directions. Drill results from the program so far include drill hole S-349, which intersected 53 meters of combined mineralization layers grading 0.29 percent nickel, including 2.6 meters at 1.31 percent nickel and 0.95 percent copper.
Sama’s share price started off the year at C$0.11 before jumping to a year-to-date high of C$0.14 on February 12.
Press Releases
Company Profile
4. FPX Nickel (TSXV:FPX)
Year-to-date gain: 13.33 percent; market cap: C$93.15 million; current share price: C$0.34
FPX Nickel is developing its flagship development-stage Baptiste nickel project in the Decar Nickel District of BC. The property is host to four targets, including the Baptiste deposit and the Van target, the former of which is the company’s primary target. The company is targeting both the stainless steel and battery-grade nickel markets.
FPX Nickel is currently conducting environmental baseline activities, and preparing for a feasibility study at Baptiste. In late January, the company announced a C$14.4 million strategic investment from Sumitomo Metal Mining Canada, which is a wholly owned subsidiary of Sumitomo Metal Mining (TSE:5713).
Through CO2 Lock, its majority owned subsidiary, FPX Nickel is pursuing carbon capture and storage technology as a means of lowering the carbon footprint associated with mining battery metals. In late February, CO2 Lock completed the first-ever successful injection of CO2 into a brucite-rich ultramafic mineral project as a part of a comprehensive field program taking place at its SAM site in Central BC. “This achievement marks a significant milestone in the development of CO2 Lock’s innovative in-situ CO 2 mineralization technology,” states a press release.
Shares moved from a year-to-date low of C$0.27 in mid-January to a year-to-date high of C$0.40 on February 5.
Press Releases
Company Profile
5. Canada Nickel (TSXV:CNC)
Year-to-date gain: 11.2 percent; market cap: C$240.57 million; current share price: C$1.39
Canada Nickel Company has honed its efforts on its wholly owned flagship Crawford nickel sulfide project in Ontario’s productive Timmins Mining Camp. A bankable feasibility study demonstrates a large-scale nickel deposit with a mine life of 41 years, an after-tax net present value of US$2.5 billion and an internal rate of return of 17.1 percent. The company has said it is targeting both the electric vehicle and stainless steel markets.
A few big-name companies hold significant ownership positions in Canada Nickel, including Agnico Eagle Mines (TSX:AEM,NYSE:AEM), which holds an 11 percent stake, and Anglo American (LSE:AAL,OTCQX:AAUKF), which has a 7.6 percent stake. In February of this year, battery and electronic materials manufacturer Samsung SDI (KRX:006400) made an equity investment of US$18.5 million for an 8.7 percent ownership stake in the company.
Canada Nickel’s share price was trading at C$1.14 before jumping to a year-to-date high of C$2.24 on January 16.
In early February, the company shared that its wholly owned subsidiary, NetZero Metals, is planning to develop a nickel-processing facility and stainless steel and alloy production facility in the Timmins Nickel District. Canada Nickel’s share price had slid to C$1.35 on February 5 before rising up to C$1.46 on February 9 following the news.
Later in the month, Canada Nickel shared successful results from initial infill drilling at its 100 percent owned Bannockburn property, and announced a new discovery at the Mann property. Mann is a joint venture with Noble Mineral Exploration (TSXV:NOB,OTCQB:NLPXF) in which Canada Nickel can earn an 80 percent interest.
Press Releases
Company Profile
FAQs for nickel investing
How to invest in nickel?
There are a variety of ways to invest in nickel, but stocks and exchange-traded products are the most common. Nickel-focused companies can be found globally on various exchanges, and through the use of a broker or a service such as an app, investors can purchase companies and products that match their investing outlook.
Before buying a nickel stock, potential investors should take time to research the companies they’re considering; they should also decide how many shares will be purchased, and what price they are willing to pay. With many options on the market, it’s critical to complete due diligence before making any investment decisions.
Nickel stocks like those mentioned above could be a good option for investors interested in the space. Experienced investors can also look at nickel futures.
What is nickel used for?
Nickel has a variety of applications. Its main use is an alloy material for products such as stainless steel, and it is also used for plating metals to reduce corrosion. It is used in coins as well, such as the 5 cent nickel in the US and Canada; the US nickel is made up of 25 percent nickel and 75 percent copper, while Canada’s nickel has nickel plating that makes up 2 percent of its composition.
Nickel’s up-and-coming use is in electric vehicles as a component of certain lithium-ion battery compositions, and it has gotten extra attention because of that purpose.
Where is nickel mined?
The world’s top nickel-producing countries are primarily in Asia: Indonesia, the Philippines and New Caledonia make up the top three. Rounding out the top five are Russia and Canada. Indonesia’s production stands far ahead of the rest of the pack, with 2023 output of 1.8 million MT compared to the Philippines’ 400,000 MT and New Caledonia’s 230,000 MT.
Significant nickel miners include Norilsk Nickel (OTC Pink:NILSY,MCX:GMKN), Nickel Asia, BHP Group (NYSE:BHP,ASX:BHP,LSE:BHP) and Glencore (LSE:GLEN,OTC Pink:GLCNF).
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Canada Nickel, FPX Nickel and Noble Mineral Exploration are clients of the Investing News Network. This article is not paid-for content.
Additional information on Nickel stocks investing — FREE
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