February 2019 | Base Metals
Nickel: Recapping the nickel bull story
Prices have pulled back after the strong run-up through January and early February. We see this as part of a natural and orderly consolidation process and could well be the precursor to another run higher, especially with LME stocks now down to five-and-a-half year lows and supply concerns lingering over Vale in the aftermath of its tailing dam disaster in Brazil. In this week’s analysis we recap the key themes in nickel’s EV bull story.
Nickel prices caught the electric vehicles (EV) bug in the second half of 2017, when it dawned on the investment community, as well as some forward-looking traders, that the use of nickel in lithium-ion batteries was going to provide a significant boost to nickel demand in the years ahead. The type of nickel the Li-ion battery manufacturers need is nickel sulfate and that brings with it some supply issues. Not all sources of nickel can be used to manufacture nickel sulfate economically. Indeed only about half of nickel ores are presently...
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