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 code Company Price change - 12 months Price change - 6 months Price Aug 7 (intraday) Market Cap
VRX VENTNOR RESOURCE 3.83333333333 -0.134328358209 0.058 18.98M
AUZ AUSTRALIAN MINES 3.70588235294 -0.0243902439024 0.08 220.96M
GBR GREAT BOULDER 3.09090909091 0.730769230769 0.45 25.5M
LSR LODESTAR MINERAL 2 -0.0357142857143 0.027 19.48M
JRV JERVOIS MINING 1.73913043478 -0.315217391304 0.315 73.96M
GMD GENESIS MINERALS 1.52941176471 0.131578947368 0.043 40.99M
ADY ADMIRALTY RESOUR 1.42857142857 1.42857142857 0.017 19.62M
RMI RESOURCE MINING 1.4 -0.428571428571 0.012 3.56M
PAN PANORAMIC RESOUR 1.30088495575 0.238095238095 0.52 253.17M
HIG HIGHLANDS PAC 1.09677419355 0.604938271605 0.13 142.06M
MCR MINCOR RESOURCES 0.948717948718 0.117647058824 0.38 85.87M
AKM ASPIRE MINING 0.8125 1.41666666667 0.029 71.78M
POS POSEIDON NICKEL 0.75 -0.0232558139535 0.042 46.81M
SCI SILVER CITY MINE 0.578947368421 -0.333333333333 0.03 7.87M
GME GME RESOURCES 0.571428571429 -0.147286821705 0.11 55.45M
AXE ARCHER EXPLORATI 0.561403508772 -0.0631578947368 0.089 16.38M
CR1 CONSTELLATION RES 0.55 0.55 0.31 11.6M
ANW AUS TIN MINING L 0.5 -0.4 0.012 23.74M
KOR KORAB RESOURCES 0.444444444444 0 0.026 8.49M
IGO INDEPENDENCE GRP 0.36935483871 -0.0629139072848 4.245 2.55B
AQD AUSQUEST 0.368421052632 0.444444444444 0.026 13.66M
WSA WESTERN AREAS 0.349576271186 0.0476973684211 3.185 875.16M
HNR HANNANS 0.333333333333 0.111111111111 0.02 35.65M
SGQ ST GEORGE MINING 0.3 -0.380952380952 0.13 38.76M
BHP BHP BILLITON 0.2874617737 0.148312308217 33.68 172.57B
MAU MAGNETIC RESOURC 0.25 -0.230769230769 0.15 22.81M
CZI CASSINI RESOURCE 0.19298245614 0.0461538461538 0.068 19.08M
RIO RIO TINTO 0.153730218538 0.0148482036325 76.55 123.69B
AGS ALLIANCE RESOURC 0.152941176471 -0.3 0.098 10.22M
MEI METEORIC RESOURC 0.03125 -0.266666666667 0.033 17.81M
VMS VENTURE MINERALS 0 -0.258064516129 0.023 11.93M
ARL ARDEA RESOURCES -0.0342857142857 -0.224770642202 0.845 88.19M
RVR RED RIVER RESOUR -0.0408163265306 -0.347222222222 0.235 120.03M
KNL KIBARAN RESOURCE -0.0645161290323 0.115384615385 0.145 41.35M
CXX CRADLE RESOURCES -0.1 -0.136 0.108 20.35M
RCO ROYALCO RESOURCE -0.116279069767 -0.254901960784 0.19 10.02M
RDM RED METAL -0.148148148148 -0.148148148148 0.115 24.18M
CLQ CLEAN TEQ HOLDIN -0.152866242038 -0.438818565401 0.665 506.53M
MGV MUSGRAVE MINERAL -0.175 -0.108108108108 0.066 21.91M
PEK PEAK RESOURCES L -0.190476190476 -0.260869565217 0.034 27.17M
PNN PEPINNINI LITHIU -0.263157894737 -0.548387096774 0.014 7.57M
IPT IMPACT MINERALS -0.277777777778 0 0.013 17.18M
AVQ AXIOM MINING -0.277777777778 -0.0714285714286 0.13 54.75M
MLX METALS X -0.287425149701 -0.323863636364 0.595 367.28M
SAU SOUTHERN GOLD -0.293103448276 -0.196078431373 0.205 10.08M
WCN WHITE CLIFF MINE -0.333333333333 -0.5 0.002 7.70M
CZN CORAZON MINING L -0.384615384615 -0.466666666667 0.008 11.39M
LML LINCOLN MINERALS -0.422222222222 -0.133333333333 0.026 14.95M
GTE GREAT WESTERN EX -0.428571428571 -0.466666666667 0.008 7.36M
SPI SPITFIRE MATERIA -0.457142857143 -0.24 0.076 40.89M
MLM METALLICA MINRAL -0.469696969697 -0.255319148936 0.035 11.29M
TAS TASMAN RESOURCES -0.709090909091 -0.563636363636 0.048 21.75M