N4 - The Battery Induced Revolution
I have been on about N4 for about a year now. N4 is just coined from a well known "Investment Advisor", who banged on about N3 some years ago. I don't care much about subscription charging advisors and analysts, but that's for another time. This information can be used for free on any other HC Nickel thread.
Current Nickel Market
The state of the economy of often called Dr Copper. The price of copper is a measure of how the world is travelling. The price of Nickel has a direct correlation to the price of copper. Obvious there are ups and downs but over the past 50 years this can be charted and tested to be true. Below is the smoothed ratio of Nickel price / Copper price.
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The Chinese have been producing commercial NPI derived stainless steel for about 10 years now. First with Indo laterite Nickel ore, then with Philo ore and if they need to they can get it from New Caledonia. Because half the Nickel that is presented in mined ore is currently used in steel the effects on the price of LME Nickel price over the last 10 years is clearly evident on the $Ni/$Cu ratio chart. (see below) With the cleanup of NPI industry and new demand for good steel the $Ni/$Cu ratio will increase. Right now it is estimated that Nickel Price should be at least 40% higher ($US17,000/t) based on this ratio fundamental alone. DYOR
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NPI produces steel that some construction companies won't use in critical structures. Why, because it is crap. NPI is highly polluting just ask the Chinese people. Cheap and dirt NPI is starting to falling out of favour. DYOR
Most of Australia's Nickel ores are Nickel Sulphide; they have to be refined into LME grade Nickel to be a consumable item. NPI production has been killing the Nickel price and Aussie nickel companies for years.
Put simply N4 is a new demand for battery grade Nickel and cleaner NPI.
Each new Telsa electric car will need 55kg of battery grade nickel. Nickel sulphides are the preferred option. If you add up all the new and existing use for Nickel rechargeable batteries it is clear that even while Nickel's use in steel manufacture is set to increase the new demand for battery Nickel will far outweigh the use of Nickel for steel in the coming years. DYOR
N4 summary
*Demand for steel increasing.
*Clean up of NPI industry
*New demand for rechargeable Nickel batteries.
*Re-establishment of $Ni/$Cu ratios
So depending on the Copper price it is not unreasonable to see Nickel returning to $Au18,000/t in the near future.
Bonus special - Nickel Price and Share Price
As Nickel price improves obviously the price of a nickel mining stock will improve, whether it be from increased margins or a greater probability that the mine will get back in to production. See chart of price probability vs actual share price for WSA.
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No surprises, fair correlation. Current raging $NP has WSA very cheap.
Mate, have a look at the chart for POS, WTF happened.
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The diversion from price probability to actual share price has lost touch ever since it became apparent that Pershing was dumping all of its shares directly in to the market. A massive contango has opened up and instead of being 6 or 7 cents based on price probability it is 2 cents. The value of great management!
GLTAH
(20min delay)