Nickel Demand Set to Grow at a Double-Digit Pace

[Music] Mr Mark Selby how are we sir I'm doing very well Mr Matthew Gordon I'm glad TOS have you been on the road I have yes I've was in Washington after I was in uh Korea and Japan after I was in South Africa so oh my goodness oh my goodness well I think you told us a little bit of what's going on South Africa potential over there was was is great um Asia what what can you tell us yeah no create Japan uh again all all good we were quite fortunate we we got to to um uh uh see uh Samsung battery plant um see see it actually come together up close which was great um and then had a bunch of good meetings with then you know next set of potential uh investors in the project uh so it uh it's great you know again a lot of Asian companies uh are you know quite good at seeing past this month's noise and you know looking you know focused on the long return prize which uh which is great so right well actually talking of this this week's noise or last week's noise actually um nichel price since to be bouncing around a fair bit what's happening yeah so since we last talked two weeks ago um we popped all the way up to almost $20,000 a ton about seven months earlier than than I thought we were going to get there uh we came a few hundred short um and as you know expected as you're consolidating you know we've now round tripped I think we're down to about 18,600 to morning again still $3,000 off the bottom so no need to panic at this point this is typical consolidation bouncing around again LM inventories had dropped down to about the mid 70,000 ton level um bounced back up uh you know over the last week and into the high 70,000 tons you know I I think the key thing is you know you know did this price move up uh you back in January we talked about you know record level short positions and so that gave me a lot of comfort in terms of you know being able to call that bottom and and likely seeing some sort of uh price bounce uh off of that and yeah no so what's happened is that you know we've seen that big big record net short position basically go to a small net long at this point in time so you know whenever you get get something sort of you know right around the balance Market you know you'll see prices whip around because you know uh on either side of a number because you know people are don't really have much conviction one way or the other yet um and or they're not in a panic because they're so exposed in One Direction that they need to be worried that the market market uh is is going to bounce you know bounce back so um you know so again I expect to see you know a bunch of fluctuations in this kind of you know 18 to $20,000 ton price range until we see some more more signs of physical demand is continuing to pick up again on the iron or Market iron or pric is moving higher I I always like that as a good indicator of where the Chinese economy is because you know at the end of the day you don't stockpile a lot of iron or as a speculative hedge um um uh you know in terms of where the economy is going so if if you're starting to see iron or prices go up it's pretty pretty good sign that the you know physical Market itself is is is improving uh you know to some extent ABS absolutely and now um we we talked and obviously just been at this conference in in Washington DC as well I supect you probably heard it for a bit there but we always been kind of clear to talk about how the battery metals tend to act in in in enison you know in PS but certainly in unison um what are we seeing on some of those other metals like copper lithium Etc yeah so those of you who are who regularly watch you would remember sort of five six months ago I said you know some of my favorite uh signals are flashing bright green um so maybe it's the time to pick up some copper uh We've now seen most of the mid sheer copper names you know TSX capstones to seos at Bay of the world you know they're up a good 75 to 100% uh since that time frame copper prices are pushing 10,000 bucks a ton you know if if I had money in those names I think now would be you know a good time to do it because those those green s those those same signals that were flashing green before are now flashing red so uh uh I I don't think you're going to see you know prices might get up for up we might have one more little push higher to 10 11,000 bucks a ton but I I don't think the fun fundamental Market is there so I think you're going to see copper prices consolidate you know in this kind of N9 to $10,000 ton range you know for the next while so um you know that's uh just a just a heads up for for those of you who who might have paid attention to that last Buy Signal right but but kind of like nickel you're saying that it a bit of price consolidation for a while maybe take some profits off the table if you if you've got some but General trend is still stay long yeah yeah yeah no I think copper uh you know we need we need more copper projects I mean I think the thing to think about getting positioned is is look at you know what we haven't seen is the full Cascade down the development chain yet so uh you know I would look just to to pick out you know some names that are maybe earlier stage uh you know because I think we're going to be in a couple year development cycle here right okay okay and and and just again always looking out for Market forecasters and Market signal signal signals uh insg put out their a forecast what can you tell us yeah so we've talked about the nickel study group from time to time and again they're un body that are there to sort of be the official number Keepers um and they meet twice a year so they come up with their forecast uh so you know the good thing is and not unexpected uh that you know surpluses that they had reported back in October that was going to be you know up over 20 and and you know almost 250,000 tons this year is now down to a just over 100,000 tons uh Surplus in 2024 uh the key thing to remember with these forecasts and it's driven me bonkers for 20 plus years uh they're the only forecast that does not include A disruption allowance so um you know one of Andy Hol one of the columnists you know covers commodity was talking about how insg reported that there's going to be a surplus this year the reality is is if you take the insg numbers if you add a you know typical 3 to 5% disruption allowance we're actually at a balanced to deficit Market this year you know the insg as well only has an 8% demand growth forecast remember we did you know 6% plus last year in a lot of negative headwinds if we only do 8% yeah my forecast is is has been you know that we're going to see double digit growth you put those together you know that lines up to a solid deficit forecast for for 2024 so um you know so I I actually saw these numbers as as as pretty bullish you know because because they tend to overestimate Supply underestimate demand in these kinds of of of Market shifts for sure so right okay okay well let let let's um let's obviously as usual stay on top of that M forward now the other a popular bit of this show seems to be uh company news um so we've got a fair bit of company news today and we're going to start with uh well first Quantum how are they fairing these days yeah yeah so there's been some goods and bads um and and actually yeah a pretty jam-packed news flow after a few quiet weeks so yeah first Quantum uh you know confirmed their previously announced uh shutting down mining at Ravens Thorp uh so they have a bunch of lower grade stock files there so they can still produce nickel um but uh they'll be you know running down their lowgrade stock files and saving cash by not spending money on on on mining uh new new material uh so you know that Supply that's definitely you know coming out of the market uh on the good news front uh Magna mining um got their permit to take water uh the significance of that is uh they what to and to discharge water um the significance of that is they need to start dewatering some of the old workings at the mine that they Acquired and and they're going to do that to be able to start doing their exploration development uh ramp that will allow them to actually mine some more and get it processed so um you know a path to you know to getting some some cash there so and you know not not an unexpected move but again you know permits until you have them you don't have them so uh it was great to see on the Magna front uh fpx also solid news um from you know the the ultra mic team uh you know they were uh announced that they processed uh pilot plant run of about 76 tons again confirming you know their prior metallurgical performance and they were looking at some process optimizations to further simplify their flow sheet you know and got some pretty good results on that front so you know again kudos to Martin and team for doing a great job there um the the uh turning over to uh Australia Ria had announced anou earlier with shangha sorry sumomo metal mining uh and Mitsubishi uh came back with a definitive agreement where they're going to form a joint venture for their L nickel ladite project um in Western Australia uh s uh smm and mitubishi going to fund close to $100 million uh you know with a pathway to get to 50% of the project I think the key here for those of you who are invested in any of the Aussie laterite stocks this is or thinking about doing it this will be a very key test you know this is most of the Australian Lites have been around since the 1970s um this is you know kind of the the the bigger and best one of the deposits of the next Bunch uh to get developed uh smm knows what they're doing they've successfully built two hpal projects and so you know I think this feasibility study which is targeted for the second half of 2025 you know will be a key key indicator of what you know Australian hpal cost structures are going to look like so um so it'll be it'll be one to watch as it goes forward and again you know good to see sort of some more Ira safe compliant nickel uh you know come to Market um I'm sticking with Australia qpm yeah so uh Queensland Pacific medals um as now said we're going to be a natural gas producer so uh you know their project was located just located close proximity some gas Fields uh and they're now sort of shelving their nickel project um sadly not surprised um you know the basis of their technology was nitric acid leeching which you know been around for quite a while you know not shown to work um at bigger scale again Never Say Never but you know I was always a little skeptical of this one you know unfortunately the attracted a bunch of auto battery you know company investment you had posco lges G all come in there their feasibility study in late 2022 had you know $227,000 a ton nickel sulfate prices and $6,000 Cobalt prices you know so you know quite o quite you know up off the end of the scale so again not surprised to see that one parked and I think we had made some comments about it uh in the past but but again it's it's tough because you just saw three Downstream guys you know get some Capital evaporated um you know for uh nickel project so yeah it's it's you know it's just and we're going to stick with Australia in a second as well um this is why when you are looking at economic studies that come out and you're looking at the headlines you're looking at those bullet points at the top of the document you got to look for those little asteras where the assumptions made about the pricing environment is so so important this is obviously a great case in point um and um you know the IRS the npvs ETC are predicated on you know giving a realistic view of the market look for base cases and and and look for stretch cases um but you know be be conservative in your assumptions about the Management's team's ability to be conservative they've got a paint in the best possible light and so that that was that we I know we've talked about in the past but it's just worth reiterating there um and yeah so the Aussies w Western Mines how are we getting on there yeah so s switching back to disseminated sulfide land um Western Mines we've mentioned them a few times they're MGA tank project uh you know again getting some pretty good um you know large the dunite uh Al you know again typical ultr mic type intervals 0.25 you know 0.2 to. 3% nickel uh what's interesting in some of their holes you know there's obviously a few higher grade structures running through there so they've had some narrow narrow narrower intervals over 1% and and again this this does occur um with with uh some of these deposits so so good to see it's just east of GES of Cal early so you know that's one to keep an eye on you know their head of expiration work started his career or you know spend a lot of time at malke again which is a grandparent of those deposits so you know that's one to keep an ey you know continue to keep an eye on as it moves forward um and then coming back to Canada on the disseminated front uh our neighbors down the road uh from timens ask and minerals uh announced a great set of Metallurgy work so you know uh recoveries uh from their Boomerang bwell project uh and again got good recovery numbers to good grade concentrate um they they showed the flow sheet um in in the press release and it may look very similar to another flow sheet for another project uh that uh I I I may watch so again great to see and again you know helping uh you know to unlock what we think is going to be the world's biggest nickel sulfide District yep uh so these names you know they keep keep um reappearing you know mostly for the right reasons sometimes not um

Channel: Crux Investor

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Keywords: mining, gold, nickel, cobalt, uranium, vanadium, lithium, precious metals, crux investor, cruxinvestor, silver, TSX, ASX, AIM, LSE, investing in uranium, investing in mining, investing in stocks, investing in stocks for beginners, investing in gold, invest in stocks, invest in stocks for beginners, invest in gold, invest in mining, analyst's notes, analysts notes, analyst notes, battery metals, electric vehicles, net zero, carbon neutral, carbon credits, nuclear, best mining stocks, TSXV

Id: Teexayec1OE

Length: 14min 9sec (849 seconds)

Published: Fri May 03 2024