Nickel Market Trends: Opportunities Amidst Price Fluctuations

Nickel market sees volatility with prices fluctuating. Investors may find opportunities in long-term nickel outlook despite recent declines. Supported by major Australian producers, it's a pivotal time for investment strategies.

Date: 31-12-2024

AI Rating: 6

Market Overview: The nickel market has been characterized by significant volatility, with prices fluctuating due to oversupply and changing demand dynamics. Prices hit a year-to-date high of US$21,615 in mid-2024 but have since dipped back below US$16,000, currently at US$15,775 per MT as of December 2024.

Impact on Companies: Companies in Australia have been notably affected, leading to declines in share prices for nickel producers. However, the long-term outlook for nickel remains robust due to growing demand from the electric vehicle (EV) industry. Investors may seek entry points despite the current climate.

Company Analysis: BHP, Australia's largest nickel miner, reported a 2 percent increase in nickel production, reaching 81,600 tonnes for the 2024 fiscal year. This performance falls within the forecast range and suggests stable operations despite fluctuations in market prices. BHP's initiatives towards sustainability, including net-zero nickel production, may further appeal to investors focused on environmental, social, and governance (ESG) factors.

For IGO, nickel production declined by 42 percent in Q1 2025 due to reduced ore grades, signaling potential operational challenges ahead. The company’s reliance on a single operation poses risks but also opportunities for recovery if production stabilizes.

Nickel Industries has robust production capability, setting a record of 131,126 tonnes in 2023, indicating strong operational performance amid market challenges. Its EBITDA of over US$100 million in the latest quarter signifies a solid financial foundation.

Centaurus is positioning itself as a major supplier as it progresses with its Jaguar project, showing promising feasibility studies that could bolster future revenue streams. Ardea Resources’ focus on the Kalgoorlie project could also contribute to the overall growth of the nickel supply chain, potentially benefiting investors in the long run.

Stocks: BHP IGO NIC