Brian Leni: Be Picky When Investing in Nickel | Summary and Q&A

TL;DR

The nickel market is expected to experience a boom due to the rise of electric vehicles, while zinc shows potential for growth. The resource sector's outlook for 2019 is cautiously optimistic.

Key Insights

• 🤪 Two-thirds of nickel demand currently goes into stainless steel production, but the rise of electric vehicles is expected to significantly increase the demand for nickel.
• 🖐️ Nickel laterites are likely to play a crucial role in meeting the future demand as they are more abundant and easier to mine than other nickel sources.
• 🇮🇩 Political situations in major nickel-producing countries like Indonesia and the Philippines can have a significant impact on the nickel market.
• 👀 Zinc presents a potential investment opportunity, as its price has come down due to tariff talks and supply concerns, but the fundamentals for zinc still look promising.
• 🥺 The slow development of zinc, lead, and silver deposits is contributing to supply constraints and could potentially lead to an increase in zinc prices.

Transcript

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Questions & Answers

Q: Why is there expected to be a nickel boom?

The demand for nickel is projected to increase due to the rising adoption of electric vehicles, which require nickel for their batteries. This increased demand could lead to a boom in the nickel market.

Q: What are nickel laterites, and why are they important?

Nickel laterites are a type of nickel ore that is more abundant and easier to mine compared to other types. They could potentially be a significant source of nickel in the future, especially with the expected surge in demand from electric vehicles.

Q: How might political situations in Indonesia and the Philippines affect the nickel sector?

Indonesia and the Philippines are major producers of nickel. Any political decisions or changes in these countries can have a significant impact on the market, as seen in the past. The upcoming Indonesian presidential election could particularly influence the nickel sector in 2019.

Q: Are there any suggestions for investing in nickel?

One investment option to consider is FPX Nickel, a company with a clear path to improving its existing PEA (preliminary economic assessment). However, it is advised to be selective when investing in nickel companies.

Summary & Key Takeaways

• Nickel's demand is set to increase significantly due to the adoption of electric vehicles, potentially leading to a boom in the market.

• Nickel laterites, which are more abundant and easier to mine, are expected to play a crucial role in meeting the future demand for nickel.

• Indonesia and the Philippines, as major producers of nickel, may have an impact on the market depending on the outcomes of their political situations.