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Nickel miners are a lot more optimistic about the market than they have been in a long time thanks to strong demand for stainless steel and lithium-ion batteries to power electric cars.

Rising demand, accompanied by declining stockpiles and a lack of new mines coming into production, saw the price of the base metal hit a three-and-a-half year high of $US15,700 a tonne in April.

The price has come off in recent weeks — and it’s a long way from a peak of $US54,000 ten years ago — but mining researcher Wood Mackenzie is predicting a long-term price of around $US25,000.

That’s a price not seen since the first half of 2011 (see graph below).

That’s good news for ASX listed nickel stocks. About 60 per cent of the 50-or-so ASX companies with exposure to nickel have made gains in the past year.

>> Scroll down for a list of ASX juniors with exposure to nickel

Leading the pack is Ventnor Resources (ASX:VRX) which at around 5.8c is trading at nearly five times its price this time last year.

Australian Mines (ASX:AUZ) is up 370 per cent at 8c compared to a year ago while Jervois Mining (ASX:JRV) has climbed about 174 per cent to 31.5c.

Nickel has been rising since May but it's a long way from its high 10 years ago.
Nickel has been rising since May but it’s a long way from its high 10 years ago.

BHP (ASX:BHP), which only just last year announced its foray into the battery metals market, is already selling about 60 per cent of its nickel to the battery sector.

And the major expects to be selling as much as 90 per cent by the end of next year, BHP Nickel West asset president Eduard Haegel told attendees at the Diggers & Dealers Mining Forum in Kalgoorlie this week.

“We’ve already today achieved over 60 per cent and expect to achieve 70 per cent by the end of this calendar year,” he said.

“I believe that we have timed our entry into the battery and nickel sulphate markets well. Interest by customers and potential customers is significantly exceeding expectations.”

This proves that battery market demand is “very, very real”, according to John Prineas, executive chairman of junior nickel explorer St George Mining (ASX:SGQ).

“We’re seeing ourselves, interest from battery manufacturers,” he told Stockhead.

“That’s sort of pointing to maybe a crunch in about two or three years in the nickel sulphide market and very good escalation of prices.”

Nickel sulphides are much cheaper to turn into battery grade nickel sulphate than nickel laterites and will fetch a premium price.

Location, location, location

St George Mining, which has a market cap of about $40 million, has a project in the same region of Western Australia that BHP and Western Areas (ASX:WSA) have nickel projects.

In the past 12 months, the stock has gained 30 per cent to trade at around 13c.

St George is exploring the Mount Alexander project that used to be owned by BHP.

As soon as St George acquired the project in 2015 it started drilling immediately and hit high-grade nickel sulphides from just 30m below surface.

The company has now defined nickel sulphide mineralisation over a 4.5km strike length.

St George has had interest from battery makers in Asia, Mr Prineas said.

“They have approached us. I can’t say much more because it’s confidential, but it tells us that this increase in the market interest is very real.”

Shortfall on the horizon 

The nickel market is heading for a deficit of between 100,000 and 140,000 tonnes, Western Areas boss Dan Lougher told delegates at Diggers and Dealers.

“The good news is we believe now there is going to be a structural change,” he said.

London Metal Exchange stockpiles have slipped below 250,000 tonnes on the back of current stainless steel demand.

The stainless steel market is still the biggest driver of nickel demand, but the increasing shift to a different lithium-ion battery chemistry that requires more nickel and less cobalt will also help.

“The largest Chinese stainless steel producer, Tsingshan, who is one of our partners has got huge growth,” Mr Lougher said.

“These guys are going to need another 400,000 tonnes of nickel just to meet their stainless steel demand.”

Here’s a list of ASX-listed stocks with exposure to nickel. (We include here stocks that are primarily nickel-focused as well as those with nickel side projects)

Swipe or scoll to reveal full table. Click headings to sort

ASX codeCompanyPrice change - 12 monthsPrice change - 6 monthsPrice Aug 7 (intraday)Market Cap
VRXVENTNOR RESOURCE3.83333333333-0.1343283582090.05818.98M
AUZAUSTRALIAN MINES3.70588235294-0.02439024390240.08220.96M
GBRGREAT BOULDER3.090909090910.7307692307690.4525.5M
LSRLODESTAR MINERAL2-0.03571428571430.02719.48M
JRVJERVOIS MINING1.73913043478-0.3152173913040.31573.96M
GMDGENESIS MINERALS1.529411764710.1315789473680.04340.99M
ADYADMIRALTY RESOUR1.428571428571.428571428570.01719.62M
RMIRESOURCE MINING1.4-0.4285714285710.0123.56M
PANPANORAMIC RESOUR1.300884955750.2380952380950.52253.17M
HIGHIGHLANDS PAC1.096774193550.6049382716050.13142.06M
MCRMINCOR RESOURCES0.9487179487180.1176470588240.3885.87M
AKMASPIRE MINING0.81251.416666666670.02971.78M
POSPOSEIDON NICKEL0.75-0.02325581395350.04246.81M
SCISILVER CITY MINE0.578947368421-0.3333333333330.037.87M
GMEGME RESOURCES0.571428571429-0.1472868217050.1155.45M
AXEARCHER EXPLORATI0.561403508772-0.06315789473680.08916.38M
CR1CONSTELLATION RES0.550.550.3111.6M
ANWAUS TIN MINING L0.5-0.40.01223.74M
KORKORAB RESOURCES0.44444444444400.0268.49M
IGOINDEPENDENCE GRP0.36935483871-0.06291390728484.2452.55B
AQDAUSQUEST0.3684210526320.4444444444440.02613.66M
WSAWESTERN AREAS0.3495762711860.04769736842113.185875.16M
HNRHANNANS0.3333333333330.1111111111110.0235.65M
SGQST GEORGE MINING0.3-0.3809523809520.1338.76M
BHPBHP BILLITON0.28746177370.14831230821733.68172.57B
MAUMAGNETIC RESOURC0.25-0.2307692307690.1522.81M
CZICASSINI RESOURCE0.192982456140.04615384615380.06819.08M
RIORIO TINTO0.1537302185380.014848203632576.55123.69B
AGSALLIANCE RESOURC0.152941176471-0.30.09810.22M
MEIMETEORIC RESOURC0.03125-0.2666666666670.03317.81M
VMSVENTURE MINERALS0-0.2580645161290.02311.93M
ARLARDEA RESOURCES-0.0342857142857-0.2247706422020.84588.19M
RVRRED RIVER RESOUR-0.0408163265306-0.3472222222220.235120.03M
KNLKIBARAN RESOURCE-0.06451612903230.1153846153850.14541.35M
CXXCRADLE RESOURCES-0.1-0.1360.10820.35M
RCOROYALCO RESOURCE-0.116279069767-0.2549019607840.1910.02M
RDMRED METAL-0.148148148148-0.1481481481480.11524.18M
CLQCLEAN TEQ HOLDIN-0.152866242038-0.4388185654010.665506.53M
MGVMUSGRAVE MINERAL-0.175-0.1081081081080.06621.91M
PEKPEAK RESOURCES L-0.190476190476-0.2608695652170.03427.17M
PNNPEPINNINI LITHIU-0.263157894737-0.5483870967740.0147.57M
IPTIMPACT MINERALS-0.27777777777800.01317.18M
AVQAXIOM MINING-0.277777777778-0.07142857142860.1354.75M
MLXMETALS X-0.287425149701-0.3238636363640.595367.28M
SAUSOUTHERN GOLD-0.293103448276-0.1960784313730.20510.08M
WCNWHITE CLIFF MINE-0.333333333333-0.50.0027.70M
CZNCORAZON MINING L-0.384615384615-0.4666666666670.00811.39M
LMLLINCOLN MINERALS-0.422222222222-0.1333333333330.02614.95M
GTEGREAT WESTERN EX-0.428571428571-0.4666666666670.0087.36M
SPISPITFIRE MATERIA-0.457142857143-0.240.07640.89M
MLMMETALLICA MINRAL-0.469696969697-0.2553191489360.03511.29M
TASTASMAN RESOURCES-0.709090909091-0.5636363636360.04821.75M