Monsters of Rock: Nickel catches its breath after running to decade highs, but EV data paints a rosy picture
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WA-based nickel miners have been clipped as the base metal moderated from decade-plus highs overnight.
It remains above US$22,000/t, levels not seen in a decade as LME stocks have fallen to low levels driven by stainless steel demand and stockpiling from battery makers.
While the end market for nickel is still dominated by stainless steel, batteries and EVs are making up a larger share, with EV sales hitting new records in 2021.
“Nickel fell from its highest prices in more than a decade, despite strong EV sales promising stronger demand,” ANZ senior economist Adelaide Timbrell said.
“Sales of electric cars in Europe overtook diesel models for the first time in December.
“In the UK, one in four new car sales in December was a battery vehicle while total new energy vehicle sales jumped 169% in China last year. This comes amid ongoing supply issues and record low inventories.”
It is a similar situation in the extremely tight lithium market, as Allkem (ASX:AKE) executives noted on a conference call this morning after announcing prices for spodumene from their Mt Cattlin mine would soar to a record US$2500/t next year.
“Particularly the expectation on numerous sources that I’ve come across with regards to demand, and expected sales for electric vehicles in 2022, is around 9 million units. So that’s a sizable step up from 6.2-6.5 million units … on 2021.”
The materials index gained 0.55% to beat out every other sector as the ASX 200 shed 0.11%, with a 1.19% gain from BHP (ASX:BHP) lifting the miners.
African gold developer Tietto Minerals (ASX:TIE) says it remains on track to deliver its Abujar gold mine into production by the fourth quarter of 2022.
It comes after the company secured the second tranche of its $85 million equity raise to build the mine, for which it also holds a $140 million debt package.
The 3.35Moz Abujar mine is expected to be one of the largest in Cote d’Ivoire, producing 1.2Moz over its first six years and 260,000oz in the first year of its 11-year life.
The company has also completed bulk earthworks at the site ahead of the construction of its processing plant and 120-room camp.
“I am very pleased to provide shareholders with our second project development update for Abujar. I would like to thank and congratulate our build team and contractors for their commitment to safety, continuing to work LTI free during December,” Tietto MD Caigen Wang said.