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All aboard the Nickel train: Blackstone and Nickel Mines breakout

Wed 12 Jan 22, 5:35pm (AEST)
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Key Points

  • Nickel stocks break out to 8-year highs amid tight supply
  • Strong capital flow into nickel stocks across the board
  • Electric vehicle uptake flagged as a key driver of nickel demand

The ASX’s top gainers are littered with nickel stocks on Wednesday as spot prices soar to levels not seen since May 2014.

The surge in electric vehicle sales and drawdown in stockpiles helped prices rally to US$21,986/t compared to the US$20,900 at the beginning of the year. 

According to Reuters, Nickel stocks in LME warehouses have fallen around -62% since April 2021. 

2022-01-12 16 08 05-Window

Nickel prices, Trading Economics

Nickel stocks moon

A flurry of buying activity for Blackstone Minerals (ASX: BSX) has launched its share price 25% higher to all-time highs.

The move is on the back of the highest volumes it has seen since inception. More than 9.5m shares have been traded compared to its 20-day average of just 1.39m. 

2022-01-12 16 16 43-Window

Blackstone breaks out on immense volume

The company operates the Ta Khoa Nickel-Copper-PGE project in Vietnam, which includes an existing modern nickel mine, currently under care and maintenance. 

Elsewhere, Nickel Mines (ASX: NIC) is up 6.8%, also at all-time highs. The company is one of the largest pure play nickel stocks on the ASX. 

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Nickel Mines, 1-yr chart

Other notable gainers include Panoramic Resources (ASX: PAN) edging 0.7% higher, Mincor Resources (ASX: MCR) up 4.8% and Poseidon Nickel (ASX: POS) rallying 7.4%.

Still catching up

Nickel stocks have been largely ignored relative to popular materials such as lithium and uranium.

Back in February 2021, Elon Musk pleaded miners to produce nickel. In a Tweet he said:

"Nickel is our biggest concern for scaling lithium-ion cell production."

Gains from household lithium stocks like Pilbara Minerals (ASX: PLS) and Allkem (ASX: AKE) far outpace a stock like Nickel Mines.

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% change since 2021, Nickel Mines vs. Pilbara and Allkem, TradingView

Taking a closer look 

Today’s optimism around nickel has yet to be reflected across broker consensus, with most price targets trailing behind current share prices. 

  • Nickel Mines: Consensus is a Strong Buy with a $1.52 price target (-1.6% downside) 

  • Panoramic: Consensus is a Buy with a 27 cent price target (trading at price target)

  • Mincor: Consensus is an Outperform with a $1.55 price target (-16.7% downside)

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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