Dumped along with everything else last month in the broad market sell-off, the nickel stocks are finding favour with investors for one very good reason – unlike nearly all other commodities, the nickel price is up for the year-to-date.

It means that the nickel producers are being traded on low earnings multiples while the developers and explorers with good stories to tell have a receptive audience again. As a result, share prices are beginning to rebuild from June’s trashed levels.

Having said that, it has been a funny old year for the nickel price. It got to a crazy $US100,000/t in March when a short-squeeze involving Chinese producer Tsingshan played out.

That the nickel price is now back at $US21,300t does not matter. The March squeeze was not representative of supply/demand fundamentals which are tied to growth in stainless steel at GDP rates, and explosive demand from the battery sector.

Investors are now awake to the idea that the March madness is best forgot, and that their focus should be on the current “normal’’ price for nickel which is sitting 15% ahead of last year’s average, and 2% ahead of its starting point for 2022.

It is an unmatched display of price resilience. Lithium, another key battery material, runs a close second, prompting the thought that battery materials generally have taken on safe haven status whereas gold has let everyone down.

It kind of makes sense given the battery metals are plugged in to the biggest thematic of our times – global decarbonisation through the electric vehicle and the storage of renewable energy revolution.

And for the time being at least, the thought that Indonesia would swamp the nickel market with nickel pig iron that has been converted into a battery material precursor has been put to the sword by sky high prices for the coal fuelling the process.

The crew at Macquarie was on to the potential for a fight back by the nickel stocks earlier than most. In a research note on the sector (July 11) Macquarie set share price targets for six stocks in its nickel/cobalt universe that were between 4% and 54% higher than ruling market prices.

The 54% share price upside stock was Panoramic (ASX:PAN) with a 30c price target. Then came Centaurus (ASX:CTM) with a 44% higher share price target of $1.30; Jervois (ASX:JRV) 37%/70c; Nickel Industries (ASX:NIC) 36%/$1.30; Mincor (ASX:MCR) 35%/$2.30, and Sunrise Energy (ASX:SRL) 4%/$2.10.

Centaurus is new to Macquarie’s nickel/cobalt coverage universe. It has come in to replace Western Areas (ASX:WSA) which was recently acquired by IGO. Macquarie said the company was its key development play.

The crew had their creative juices flowing when they headlined their initiation report on Centaurus with “Jaguar lunging towards production’’. Jaguar is the company’s 730,000t (resource) nickel project in Brazil.

Macquarie reckons the resource could grow to 1mt.

“It has the potential to be a 20,000t annual producer, with an initial 13-year mine life.’’

Like the other nickel stocks, Centuarus has been in recovery mode, working its way up from 87c two weeks ago to around the $1 mark this week. Similar share price repair work is under elsewhere in the sector for all of the reasons mentioned above.

Garimpeiro reckons the return of interest to the nickel producers/developers will rub off on the nickel explorers before long. A decent discovery by any of them will make sure of that.

One that has caught the eye recently is the neatly named NickelSearch (ASX:NIS) which is trading at 12c for a market cap of about $12.5m. It was a 15c stock at the start of June, and a 23c stock at the start of the year.

Its Carlingup project 20km east of Ravensthorpe in Western Australia comes with a 171,000t nickel resource from a number of deposits, some of which were worked between 2000-2007. The focus in coming months though swings to probing up 11 priority exploration drill targets.