The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
bluebudgie
The EU might have made what they want to to do clear. The one thing they haven't done is clarified how they're going to achieve it. That's the hard part.
TDT
That is good point about the Nickel Mattei is using the supply of future stainless steel . Also environmentally it will not meet the ESG standards . So only buyer will be the Chinese. The rest of world will still battery grade Nickel from other countries
But we should asking what does it add to overall cost to produce Nickel Matte .
I posted few weeks back the $11k is the minimum cost to produce it . So we need a higher price than that to make it profitable .
Luke 2
That's exactly what I said in my 6th March 2021 post at 10:02hrs.
There's no apparent downside for Horizonte no matter which way this goes.
TDT
I get what you are saying TDT, but if the Chinese manage to keep the nickel price down to below the incentive price for the majority of new mines, it will be mostly their cake and they will be eating it.
Makes HZM a tasty morsel.
"The Chinese are not increasing overall nickel supply....."
This would suggest otherwise and its not just the Chinese either.
https://www.dropbox.com/sh/htlh6dkmakiecb9/AAD0QTyYUKo8NRK8JIapiMgNa?dl=0
The map in the attached folder gives you some idea of the new mines/processing plants that have been built in Indonesia in recent years, some for stainless others for cathode. The interesting thing here is the speed with which these operations were built. Admittedly most were built to replace processing operations in China after the Indonesians made it clear that they were going to introduce an ore export ban. Nevertheless the number of projects that sprang up after that decision was taken and the speed with which they were developed is impressive. The bottom line, IMO, if they can build that quickly it would suggest they'd be able to keep on top of increasing demand. There's no shortage of nickel laterite in Indonesia.
Having said all of that I think one of the major plusses for Horizonte is we're not in Indonesia. I spent years working there and it doesn't take much to rub the locals up the wrong way, especially if you're Chinese.
TDT
One other point I would like to add if I may. It's good sometimes to join a few dots.
Reference the VW emissions scandal circa 2017, reference Glencores travails ref DRC cobalt. I put it to this BB that major players won't touch 'dirty' nickel with the proverbial sh**try stick/ barge pole. Somewhere in deepest China it may serve some element of their domestic market. The corporate risks of even an association with bad green credentials are huge nowadays. Tesla et al are no fools, it's both actually toxic, and just as important, PR toxic. I just don't they'll go there, scandal ridden imo.
Thanks Tricky that article is one for the album written by someone with skin in the game.
The Chinese are not increasing overall nickel supply, same cake just a slice taken out with a different flavour.
To increase cake supplies you need more nickel mines, the Chinese have just made that much harder, unless of course you are in the lowest quartile for costs.
If you are also ESG compliant, with a hydroelectric power supply, what a desirable confection you become.
Morning, read that with great interest.
My take away is I think we're OK. These developments represent a new stream, but an environmentally poor one. The end users e.g Tesla specifically do not want dirtier nickel, quite the opposite. Secondly, it will not eschew the overall impending supply deficit. Thirdly it appears to reallocate supply from ss to ev rather than increase total supply. It's something to keep an eye on, but not to panic.
Here's another interesting article about the use of NPI/Nickel Matte for the EV market.
https://www.northernminer.com/commentary/has-china-shattered-battery-nickels-supply-chain-bottleneck/1003828913/
fulmar29
Its interesting to read what the EU is currently saying on the issue of critical raw materials.
https://ec.europa.eu/docsroom/documents/42881
Of course this is from a European perspective but its a good indicator of how much of a problem they think nickel will be going forward. If Tsingshan has cracked the nickel laterite to nickel sulphate processing route then there's unlikely to be a problem with supply but that route is not proven just yet.
TDT
TDT-I agree that the recent price rise is in the most part sentiment driven,but shortages created by contracts like that just make less available to everyone else and then when it hits the fan the real shortage will cause a long term sustained rise and leave the fluctuating sentiment rises look like small change.Bottom line is that there is not,and there never will be enough battery minerals available to supply the market (at anything like reasonable prices) with what it says it will need.
The Tsingshan development shouldn't come as any surprise. Andy Home was highlighting the same back in 2018 as this article makes clear.
https://www.reuters.com/article/batteries-nickel-ahome/column-chinas-tsingshan-rains-on-nickel-bulls-party-andy-home-idUKL8N1XA6DM?edition-redirect=uk
A nickel price just below the $20,000/tonne incentive level is no bad thing.
TDT
fulmar29
That article merely confirms just how much of the recent rise in the price of nickel has been sentiment driven and not fundamentals driven. If Tsingshan does develop a novel processing route for nickel laterite to nickel sulphate I wouldn't put it past them, in the fullness of time, to develop a carbon neutral way of doing it as well.
15/16 years ago NPI didn't exist. It was born out of the high nickel prices of the early naughties and it was Tsingshan that commercialised it. The old saying "the cure for high prices is high prices" being very much the case. With this current development, however, it seems like Tsingshan might be ahead of the game and if they are it would seem to suggest that we aren't going to see the same sky high prices. Does that matter? As long as you are in the lowest cost quartile I guess not.
TDT
Indeed!
'Goldman’s conclusion is that Tsingshan’s disruptive processing path will not be enough to affect supply deficits for battery-grade metal. The bank is holding its 12-month price forecast at $21,000 per tonne.'
Lovely :)
' the matte conversion route requires an alignment of NPI, matte and sulphate premiums to be consistently profitable.'
'It also comes with a heavy carbon footprint'
Hmmmmm........
https://www.mining.com/web/nickel-price-slumps-as-electric-dreams-are-rudely-disturbed/ The world was never going to be able to produce anywhere near enough battery minerals to meet the targets of world nations eager to "go green",and this latest deal does absolutely nothing to change that.In effect all it does is switch some supply to a specific producer so therefore reducing supply to others. Possibly making the impossible targets of the world slightly less impossible but nevertheless still impossible,and in the meantime prices will be made to fluctuate by commodity traders.