Nickel: Powering Forward - Stainless Steel & EV Manufacturers Driving Recovery

• Nickel prices have retraced to around $17,500/ton after a 15-16% rally, but remain over 10% above recent lows
• Battery sector restocking is underway in China, with nickel sulfate prices up 2%, while stainless steel demand looks sluggish
• Canada Nickel is pleased with drilling results at their Reid and Newmarket targets, which could add several billion tons of nickel resources
• Canada Nickel plans to release 7 resource estimates in the next 15 months and make 6 new discoveries, with significant drilling ongoing
• FPX Nickel aims to begin the environmental assessment process for their project in Q1 2024, targeting potential production start in 2028

Nickel Market Price

Nickel has emerged as a crucial metal due to its key role in the rapidly growing electric vehicle battery industry. With demand expected to surge in the coming years, nickel presents a compelling investment opportunity.

After an impressive 15-16% rally, nickel prices have recently retraced to around $17,500 per ton. However, prices remain over 10% above recent lows, indicating underlying strength in the market. Mark Selby, CEO of Canada Nickel Co., expects prices to consolidate around current levels for the next few months before resuming their upward trajectory. He forecasts nickel reaching just over $20,000 per ton by year-end.

The Latest Battery Show, with Canada Nickel's Mark Selby

China's Role

China plays a pivotal role in the nickel market, as it is where most battery materials are produced. Battery sector restocking is well underway in China, with nickel sulfate prices rising 2% recently. Although stainless steel demand, a major nickel consumer, looks sluggish, Selby believes any slowdown will be met with more stimulus from the Chinese government, supporting stainless prices.

Geopolitical Factors

Geopolitical factors, such as the US elections, are not expected to significantly impact the nickel market. Selby notes that one of the few issues with bipartisan support is reducing China's role in critical mineral supply chains. As a North American nickel development project, Canada Nickel stands to benefit regardless of which party holds the White House.

Company Spotlight

Canada Nickel has reported promising drilling results from its Reid and Newmarket targets. The company is particularly pleased with the Reid property, where all 16 holes intersected mineralization, with the best hole to date returning nearly 700 meters at 0.25% nickel.

Selby states: "We've confirmed that the mineralization is 800 meters wide or twice the width of what we have at Crawford. We're looking at something about 2 kilometers long, 800 plus meters wide and down to a depth of 600 plus meters. If you multiply that through, that gets you to several billion tons of additional resource."

Canada Nickel plans to release seven resource estimates over the next 15 months and make six additional discoveries. With four rigs currently drilling and a fifth to be added in April, investors can expect a steady flow of news from the company.

Spruce Ridge Resources has acquired a nickel laterite project in Oregon, one of the few places in the United States with nickel deposits. The project benefits from historical resources and advanced work, making it an interesting opportunity.

FPX Nickel is another company to watch, as it aims to begin the environmental assessment process for its project in Q1 2024. If all goes well, the company could potentially start production in early 2028, making it one of the few projects with a credible path to production.

The Investment Thesis for Nickel

• Growing demand from the electric vehicle battery industry
• Potential for significant price appreciation as demand outpaces supply
• Geopolitical support for reducing China's role in critical mineral supply chains
• Promising exploration and development projects in North America
• Actionable Advice: Consider investing in well-positioned nickel exploration and development companies with quality assets and experienced management teams

The nickel market presents an attractive opportunity for investors seeking exposure to the growing electric vehicle battery industry. With demand expected to surge and supply constraints looming, nickel prices have the potential for significant appreciation. Companies like Canada Nickel, Spruce Ridge Resources, and FPX Nickel are well-positioned to benefit from this trend, making them worthy of consideration for investors bullish on nickel.160-Character