Tesla Calls for NetZero Nickel. This Company Can Do it.

Recording date: 30th July 2020

Our weekly Nickel Market Insights with Mark Selby, Nickel Market Commentator and CEO of Canada Nickel Company (TSX-V: CNC) will help you stay ahead. Stay up to date by listening to our weekly market roundup on Nickel.

Elon Musk impact still ripping through the nickel market – nickel at $6.25 – up 5% since his comment – no change fundamentally

– with gold at all-time highs, if you bought CS, TKO, or a range of other liquid high torque copper stocks, you have outperformed most gold companies.

– Still not clear support for higher prices at current time

– nothing clear on inventories, supply/demand fundamentals

The Positives

– Chinese reflation still ongoing

– ore imports for June 2020 dropped year over year (YoY) as the Philippines couldn’t make up for Indonesia. And ore stockpiles only growing slowly. Need multi-million tonne build to make up for Philippines wet season in winter when ore imports drop off.

– Stainless imports up very substantially YoY. If more than enough NPI, why bother boosting imports

Key Discussion Points

Leading analyst published view that Indonesia has all nickel covered until 2025 – if so, why is Elon Musk & Tesla talking about nickel as primary constraint and why he asked us not to wait for higher prices.

– Nickel sulphate premium doesn’t exist – trading at a discount, no sustainable premium over long-term

– Class I versus Class II – despite getting huge amount of air time from many – agree not an issue, will flow from ore source to end product.

– Amount of nickel coming from Indonesia – nearly 900ktpa more by 2025 versus 2018. But where will the next 1.6Mt that is necessary come from by 2030.

– Nickel demand forecast – needs to be 4-5% peak-to-peak + EV demand (less loss of demand in aerospace and oil & gas)

– Without any clear forecast from consumers it is hard for analysts to have aggressive forecast

If automakers want lots of nickel by 2025 and 2030, they need to provide the information that will allow the industry to gear up to produce it. Realise their own estimates are proprietary, but they need to provide ranges. If they don’t, investment community won’t figure out, and they’ll pay way more than they should to get it – is better for all of us, if no surprises

– Offsetting supply – will see high carbon, non-Chinese ferro-nickel producers get squeezed so will offset rest of nickel supply growth from Indonesia

– Western automakers will not use high carbon, high footprint nickel in their cars. They will not rely on Indonesia/China as primary source

Interview timestamps:

00:00 – Introduction

2:53 – Elon Musk’s Statements: Impact and Implications

6:32 – China and the Philippines: Complex Relationship

9:21 – “Nickel’s Covered ’til 2025”: Misinformed Predictions

16:52 – Ethical Mining: Class 1 & 2 Debate, Footprints of Mining

24:15 – Clean vs Sufficient: Repercussions, Supply & Demand

29:52 – Market Moods: What’s Next for Price?

31:01 – Any Calls Regarding NetZero?

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