Nickel at 9-year highs; 3 ASX stocks under the spotlight

Highlights

  • Nickel price hits nine-year high levels on the back of strong demand and tight supplies.
  • Vale SA has squeezed its production guidance for the current year due to an ongoing strike at its Canadian mine.
  • Various ASX-listed nickel miners have recorded significant gains in the last one year due to rising nickel prices.

Nickel prices surged to nine-year highs to trade at US$21,046 per tonne as of 21 October 2021 on the back of robust demand and tight supplies. The market expects the current supply of nickel to fall short of the resilient demand for the critical metal thanks to the growing demand for electric vehicles.

Vale SA, one of the leading producers of nickel has squeezed its production guidance for the current year due to an ongoing strike at its Canadian mine. On the other hand, one of the leading nickel producers of the world, MMC Norilsk Nickel PJSC reported lower production in its third-quarter release. Additionally, the production of nickel in the Philippines, the second-largest nickel producer in the world was nearly 10% lower this year due to bad weather conditions in the country.

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Further, nickel inventories at ShFE approved warehouse tumbled to the lowest level since December 2019, further aiding nickel prices to scale record high levels. 

In this backdrop, let's have a look a three promising ASX-listed nickel stocks that have performed well in the past and are expected to grow in the future.

ASX Nickel Stocks

Source: ASX as of 21 October 2021

IGO Limited

IGO Limited (ASX:IGO) is a Perth, Australia-based metals and mining company that is engaged in the exploration and development of nickel and gold. IGO holds 30% interest in Tropicana Gold Mine.

The company recently commenced diamond drilling on the Fraser Range JV’s Red Bull tenement, located in Western Australia. The drilling program at the site is designed to test the two conductors traced during the electromagnetic survey. The Fraser Range project is considered prospective for magmatic nickel-sulphide deposit.

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Panoramic Resources

Based in Perth, Australia, Panoramic Resources (ASX:PAN) is a nickel and cobalt miner. The company holds and operates projects in Western Australia’s Kimberley region. PAN was incorporated in 2001 with a goal to develop the Savannah Nickel project.

Mine Site

Mine Site | Source: © Alfotokunst | Megapixl.com

On 21 October 2021, the company provided an update regarding the advancement of operational activities at the Savannah Nickel Project where it has produced the first nickel-copper-cobalt concentrate from the plant and stockpiled it at the site.

Mincor Resources

Incorporated in 1996, Mincor Resources (ASX:MCR) is based in Perth, Australia. The company is engaged in the exploration of gold and nickel. The miner has successfully completed a Placement and Share Purchase Plan of AU$66.3 million last year.

A maiden drilling program at ‘Golden Mile’ and ‘Hartley’ targets is currently underway along with the development of Cassini and Northern Operations.

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Bottom Line

Given that the EV market is growing swiftly, the demand for nickel is expected to be strong as it is used in the manufacturing of electric vehicle batteries. This should bode well for nickel producers.

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