Leni also offered his take on how 2018 battered base metals and what will need to happen for prices to start looking up.
The current excitement around nickel has been driven by the electric vehicle market and how the metal is used in the burgeoning battery industry, but for a mineral that is mostly used up by stainless steel, the EV narrative can seem a little overblown.
According to Brian Leni of Junior Stock Review, the focus on EV is because of how disruptive it has the potential to be, despite just being “the icing on the cake” when it comes to current demand.
“This is around 1.1 million tonnes of demand, and the fact is [nickel is] a 2 million tonne market so you’re looking at roughly 55 percent of extra demand over the course of the next ten years.”
“This will have an impact, if it comes to fruition,” said Leni.
“So time will tell but you kind of wonder, where is this supply going to come from?”
In the wide-ranging interview, Leni also offered his take on how 2018 had battered base metals and what would need to happen for prices to start looking up. Leni was in Vancouver to talk all about nickel in 2019 and beyond though.
“The biggest overlying impact to the nickel market is the Chinese announcement of an high-pressure-acid-leaching plant in Indonesia and why this is affecting the nickel market and what the implications will be if they’re successful.”
Looking into demand, he also offered insights on where investors should be looking if they want to cultivate a bullish outlook on the metal.
“You start with stainless steel and where you feel stainless steel is going to be in the future. Second, I think probably the biggest point that I was nervous about was global inventories. If you rewind back to 2016…inventory levels were almost half a million tonnes.”
He continued: “I really thought to myself that this is a really big hurdle that’s going to have to be overcome for us to get into a bull market — and low and behold, 2018 was an amazing year for drawdown on LME supplies.
“So I think continued drawdowns on nickel inventory and considering that our supply numbers are dwindling — these are great signs and stuff we need to watch moving forward.”
Watch the video above to learn more about Leni’s thoughts on nickel and his top stock picks for 2019. You can also click here to view our full VRIC 2019 playlist on YouTube.
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Securities Disclosure: I, Scott Tibballs hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.