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Developing the next major nickel project in Brazil

Nickel Market

Nickel Price

From the start of the year, nickel prices started to move upwards and nickel is the best performing base metal of 2019. But we believe this is just the beginning of an exciting story and prosperous future, about to unfold.

The Price of Nickel hit 16-month highs in August 2019 reaching over $16,000/tonne on the London Metals Exchange (LME). The price moved even higher in the early days of September, moving to and above $18,000/tonne on the LME.

LME Nickel Price graph January to July 2019
This means that the nickel price is up around 70-80% year-to-date as a result of strong demand in the Stainless Steel sector, combined with increasing new demand coming online from the rapidly growing Electric Vehicle Industry. Other factors have also played into the nickel price rise, such as the Indonesian ore ban due to come into force in 2022. Indonesia announced that it would bring forward the ban to January 2020. Many analysts predict further price increases and we are seeing that investors are becoming increasingly interested in the nickel market. See our Investing in Nickel page for more information on how to invest in the nickel commodity.

The return of deeper deficits in 2020 will strengthen Horizonte’s position and reaffirm the outlook for long-term, structural deficit in nickel. Wood McKenzie, leading nickel market analysts, forecast that annual average deficit of 60 kt through to 2027 will return stock days of consumption to less than 100 days for the first time since 2006 and bring nickel prices closer to US$25,000/t by 2025 and US$28,000/t by 2027.



LME nickel stocks at lowest level in five years as of July 2019, a good sign for investors

Nickel demand for Electric Vehicles

Use

Nickel is a US$20+ billion per year industry with over two thirds of the metal today going into stainless steel production.

Nickel use in EV batteries is forecast to grow significantly over the next 10 years and this new nickel use will result in a structural change in the nickel market.

Demand

World stainless melt production is expected to increase by around 16% by 2025.

Wood Mackenzie estimates strong demand from non-stainless applications, increasing by approximately 5% a year, from approximately 750 kt in 2019 to 980 kt in in 2025 and 2.11 Mt in 2040. This sustained period of strong growth is driven by our forecasts of nickel consumption in Li-ion batteries for electric vehicles (EVs) and energy storage (ES), which we anticipate will accelerate from the mid- to late-2020s.

Would Mackenzie also predicts an increase in nickel demand from EVs from 128 kt in 2019, to 265 kt in 2025 and 1.23 Mt in 2040. Over that period the share of global nickel demand taken by EV/ES will increase from only 4% in 2018 to 31% in 2040.

Supply

Global nickel supply, top nickel producers by country:

World nickel producers

The Company believes there has been a significant under-investment in the sector. Very few large-scale nickel projects have been developed over recent years and stocks on the LME are at their lowest levels in over 6 years.

Greenfield nickel projects take a long time to move from exploration through to production. Horizonte Minerals is uniquely position with two advanced large, high-grade and scalable nickel projects that are 100% owned, providing investors with entry points into both the stainless steel and electric vehicle battery markets, providing investors with the potential for long term sustainable returns. See more on our Investing in Nickel page or download the Investor Presentation.

Sources:
Wood Mackenzie
LME


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