What Effect will this shutdown have? BHP Announces closure of Kalgoorlie Nickel Smelter.
What Effect will this shutdown have? Macquarie Research Equities were looking for a Nickel Supply surplus of ~30kt of Nickel this year and next. This oversupply would presumably place downward pressure on Nickel prices. However, MRE estimates that the BHP shutdown could reduce BHP’s nickel production by ~ 28kt. The effect of this would be to bring Nickel supply back into equilibrium, and possibly even deficit. This is significant news for potential Nickel prices, and MRE believes it could stimulate a swift move back towards US$14/lb in the short term.
Who will benefit from this? This near term market catalyst is a positive for junior Nickel miners, with Western Areas one of MRE’s preferred exposures.
WSA Price at posting:
0.0¢ Sentiment: None Disclosure: Held
