Nickel miners soar as commodity price stages turnaround..well maybe not Canadian listed companies yet but if the confidence in Australian markets is a precursor then consider buying low.
Investors in Australia's junior mining sector are feeling the same pain as those in North America but Paul Adams, an analyst with brokerage firm DJ Carmichael in Perth, believes select junior resource companies will outperform the broad markets as macro-level events impact certain commodities. Adams suggests that strong demand fundamentals in nickel, zinc and uranium could mean better years ahead for equities with exposure to those commodities.
Motley Fool -
By Mike King - October 29, 2014
Nickel miners soar as commodity price stages turnaround
ASX-listed nickel miners are soaring on the ASX today, as the commodity price stages a resurgence.
Nickel prices had fallen more than 20% to below US$7 a pound, as stockpiles surged 45% to record levels, according to Bloomberg.
Investment bank Goldman Sachs is forecasting that China will cut its nickel pig iron output by around 70,000 tonnes a year, in an attempt to reduce pollution levels prior to the Asia-Pacific Economic Cooperation meeting that begins in Beijing on November 10.
Earlier this year, Indonesia placed a ban on the export of unprocessed ore, including nickel, which saw the commodity’s price and stockpiles soar by 50% from January to mid-May.
In mid-afternoon trading, Mirabela Nickel Limited had jumped 27.4% to 7.9 cents, Poseidon Nickel Ltd was up 8.6% at 15.2 cents, while Sirius Resources Ltd and Western Areas Ltd had gained 6.0% and 5.7% respectively. Panoramic Resources Ltd was also up 4.8% at 55 cents.
Mirabela shares have surged more than 113% in just the past five days, after exiting voluntary administration. The miner was forced to recapitalise the company, in order to re-list at the end of June this year. The problem for Mirabela is that its latest quarterly report showed the company was likely making a loss, and will need to the nickel price to continue to rise.
Poseidon Nickel is still ramping up to commercial production at a number of nickel projects, but has signed an offtake agreement with BHP Billiton Limited . Sirius Resources continues to develop its Polar Bear and Nova prospects, receiving major construction tenders from a number of parties, receiving a mining lease for Nova and raising $189 million from shareholders.
Panoramic today says it expects to produce 20,000 to 21,000 tonnes of contained nickel in the 2015 financial year, while Western Areas continues to drive production higher and its operating costs lower.
With a possible recovery in nickel prices underway, it wouldn’t surprise to see the nickel miners gain further from here.
While mining services companies bite the dust and natural gas stocks soar, there's a 'hidden' set of resources stocks the market is simply overlooking.