Top 8 Nickel Stocks On The ASX

Nickel is an essential metal in many industries. It is widely used in the stainless steel industry, but there’s now an ever-increasing demand for it in the renewable energy space. Adding nickel to your portfolio can potentially increase its value, especially with its positive outlook. 

There is an abundance of precious metals in Australia. It is no great surprise then to know that Australia is one of the world’s largest nickel producers, and many companies are exploring mining sites to meet the global demand for nickel. If you don’t want to trade nickel, you may opt for nickel stocks in these companies. But you may wonder: Are ASX nickel stocks worth trading? Read on to find out if they are and more. 

What Are Nickel Stocks?

Nickel stocks are shares of companies directly involved in discovering, mining, and processing nickel metal. If you’d rather not trade it as a physical metal, nickel shares offer you indirect exposure to the nickel markets. 

But before we dive into several attractive nickel stocks, let’s take a closer look at the metal itself.  

Nickel Metal: What is it?

Nickel is a silver-coloured base metal with a lustrous appearance. It has many practical and industrial uses that make it one of the most valuable materials in the world today ^[1]. 

For example, nickel is used in alloys because of its hard and rust-proof properties. It can also be used as a corrosive-resistant coating to strengthen metals like steel and copper. However, that’s not the only purpose nickel serves.

Uses of Nickel

Nickel serves plenty of purposes besides just making alloys. Let’s explore some of its common uses.: 

Currency

Many global currencies have used nickel in different coins, alongside steel, copper, and other metals. For instance, in the US, a “nickel” was a one-cent coin minted from an alloy of copper and nickel. It was also known as the “Flying Eagle cent” and was in circulation between 1857 and 1858 ^[2]. 

Here in Australia, the 5, 10, 20, and 50-cent coins are an alloy of copper and nickel. Before the government took the one and two-cent coins out of circulation, they were 97% copper, 2.5% zinc, and 0.5% nickel. 

Lithium-ion Batteries

Nickel is an essential component of modern technologies, including lithium-ion batteries. Lithium-ion batteries have a higher capacity to store power than standard batteries. They’re also rechargeable and lightweight, which makes them ideal for smartphones, laptops, and other electronic devices ^[3]. 

With skyrocketing cobalt prices and supply problems, many lithium-ion battery manufacturers are using more nickel in their batteries. Nickel makes lithium-ion batteries more stable and less prone to fires. This metal also increases the battery’s power capacity, longevity, and number of recharges. 

Electric Vehicles

Electric vehicles (EVs) also use lithium-ion batteries, which require nickel for better functionality. Bloomberg predicts that EVs will represent 33% of all global cars by 2040, and plenty of nickel will go into producing battery units for them ^[4]. 

How is Nickel Produced?

There are two potential sources of nickel: Laterite and nickel sulphide.

Laterite

Nickel laterite is the most common form of nickel ore and makes up over 60% of the world’s nickel resources. Laterite is more abundant, covers larger areas, and is ideal for open pit mining. The only problem? Laterite often contains many other impurities, making it tougher and more expensive to process into battery-grade nickel ^[5]. 

Nickel Sulphide

Sulphide makes up 40% of all nickel deposits and may be found on the surface or at depth. Despite its scarcity, nickel sulphide produces 60% of the world’s nickel. Sulphide concentrate requires less processing into battery-grade nickel once mined because of better ore purity ^[6] . 

Why Invest in Nickel Stocks?

Nickel stocks may be worth investing in, depending on your trading strategy and goals. Here are some reasons to consider them: 

Green Energy and Electric Vehicles (EVs)

Nickel is, by mass, an essential element for the cathodes of EV lithium-ion batteries. As battery formulations evolve, more nickel may be used to increase the energy density of lithium-ion batteries ^[7].  

With the demand for EVs rising in the coming years as economies move toward green energy, that may positively impact the price of nickel. 

Demand for Stainless Steel

Although green energy and EVs present a new and exciting market for nickel, stainless steel remains the largest market for this metal. The demand for stainless steel continues to increase worldwide, as well as the demand for nickel ^[8]. 

Portfolio Diversification

Adding nickel to your portfolio may be an excellent way to diversify your risk. Although you may have gold, silver or other precious metals in your portfolio, adding nickel may be an advantage. Why? Unlike gold, nickel tends to move with the market rather than counter it [9]. 

Coupled with an increase in demand for nickel from China and for stainless steel and EVs, that may drive the prices of this metal up and increase the value of your investments.

8 Best Nickel Stocks in 2022

Here are eight outstanding ASX nickel stocks you may consider this year. 

1. BHP Group (ASX: BHP)

Market capitalisation: $186 million

BHP Group (Formerly BHP Billiton) is an international company that mines base metals and materials. Its headquarters are in Melbourne, Australia. BHP Group has a nickel sulphide mine in the Nothern Goldfields in Western Australia, and that’s one of its five mines across Australia and North and South America ^[10]. 

Besides mining nickel, BHP Group also develops and refines nickel for shipping to other markets. For example, BHP Group increased its nickel supply from 80,100 to 89,000 tonnes between 2020 and 2021 ^[11].  

That amount is slated to increase in the coming years, partly because of increased demand from car manufacturers.  

In July 2022, BHP entered into an agreement to supply nickel to the Ford Motor Company from its West mine in Western Australia. Supply may begin as early as 2025, according to reports. This multi-year deal also involves other commodities and aims to ease the pressure on battery supply chains for the car manufacturer ^[12]. 

2. Poseidon Nickel (ASX:POS)

Market capitalisation: $156.3 million

Poseidon Nickel explores and develops nickel and gold with three high-quality nickel sulphide mines within a 300-kilometre radius of Kalgoorlie in the Goldfields region of Western Australia. It has a resource base of roughly 400,000 tonnes of nickel and 180,000 ounces of gold ^[13]. 

Windara, Black Swan and the Lake Johnston nickel projects are the three mines run by Poseidon Nickel. In 2020, the company prospected and discovered the Abi Rose nickel deposit at Lake Johnston and the Golden Swan high-grade deposit at the Black Swan mine ^[14].  

In early August, Poseidon Nickel restarted its mining activities at Black Swan and began making developments around the Lake Johnston and Windara projects. All these activities continue to occur as the demand for nickel is expected to soar. 

3. Nickel Industries (ASX: NIC)

Market capitalisation: $2.47 Billion

Nickel Industries (formerly Nickel Mines) is a mining and processing company based in New South Wales. It produces pig iron, a key element in stainless steel production. The name change was approved in May 2022, as the company transitioned from being a nickel miner and explorer to a global processor ^[15]. 

This company has interests in several nickel operations, including: 

• The Ranger Nickel Projects 
• Hengjaya Nickel project 
• Angel Nickel project 
• Hengjaya Mineralindo nickel mine 

After getting into an agreement to acquire a 70% stake in Shanghai Decent’s Oracle nickel project in December 2021, it completed a 30% acquisition by May 2022. So far, Nickel Industries has had a positive year, with their Angel Nickel Project performing 10% better than expected during the first full quarter of 2022. 

4. IGO Limited (ASX: IGO)

Market capitalisation: $9.53 Billion

IGO limited has 100% ownership of the Nova nickel-cobalt mine in the Fraser Range of Western Australia. Besides these three metals, IGO Limited also deals in gold and lithium. In 2020, it bought a 25% stake in the Greenbushes Lithium mine and a 49% stake in the Lithium Hydroxide mine in Kwinana ^[16] . 

In the financial year ended 30 June 2022, IGO Limited posted a Net profit after Tax of AUD 331 Million due to strong metal prices and the dominance of lithium. This net reduction was about 40% of its earnings in 2021. However, IGO intends to increase its nickel business in the coming financial year ^[17]. 

5. Centaurus Metals (ASX: CTM)

Market capitalisation: $465. 54 million

Centaurus is a Brazilian mining and development company that aims to supply nickel sulphide and help make the future greener and cleaner. It is developing its advanced Jaguar Nickel Sulphide project in the Carajas Mineral Province of Brazil. It has a registered office in West Perth^[18]. 

In July, Centaurus announced that Jaguar is becoming a world-class nickel project. It expects the Jaguar project will produce more than 20,000 tonnes of high-quality nickel per year in the coming years while meeting the highest possible sustainability standards. 

6. Panoramic Resources (ASX: PAN)

Market capitalisation: $441 million

Panoramic Resources owns and runs the nickel sulphide mine and processing plant in East Kimberley, Western Australia. Although put on care and maintenance in 2016, it was revived in 2018 after the discovery of the Savannah North Orebody. It was shortly shut down in 2019 because of the pandemic, then restarted in April 2021 ^[19]. 

The Savannah orebody is expected to produce an estimated 9100 tonnes of nickel, 4700 tonnes of copper and 700 tonnes of cobalt for the next 12 years. It has also signed a 5-year deal with Trafigura, a Swiss commodity trading group for the offtake of the nickel concentrate.  

In June, Panoramic Resources completed its fourth successful shipment of ore containing about 10,500 tonnes of copper-cobalt-nickel concentrate to Jinchuan Group. Besides that, they’ve begun developing a second mining front in the Savannah Mineral source ^[20]. 

7. Mincor Resources (ASX: MCR)

Market capitalisation: $1.02 Billion

In March 2021, Mincor Resources opened the new Cassini nickel sulphide mine in Kambalda, Western Australia. The Cassini mine was the newest in a decade and produced its first mineral concentrate in the first quarter of 2022 ^[21]. 

BHP Group has signed a deal with Mincor resources to buy Mincor’s nickel concentrate and convert it for use in EV batteries. Cassini’s high-grade nickel deposits make it a low-cost production centre over the lifetime of the mine. 

8. Western Areas (ASX: WSA)

Market capitalisation: $1.26 Billion

Western Areas runs the two highest-grade nickel sulphide mines in the world out of the Forrestania and the Spotted Quoll and Flying Fox mines. This company processes class I nickel sulphide ore through their concentrator and sells them to BHP Nickel West and the Jinchuan Group. 

Currently, the company continues to develop the Odysseus underground mine, with at least ten years of exploration expected out of it. Western Areas projects this mine will put out at least 14,500 tonnes of nickel annually. 

Although IGO Limited intended to acquire Western Areas for a fee close to AUD 1.10 Billion, the deal is now on hold. The Western Areas’ Board of Directors deemed the deal as not on the best interests of their shareholders ^[22].  

How to Start Trading Nickel Stocks on the ASX

Trading the best nickel stocks on the ASX is easy to set up and start. Here’s how to go about it:

1. Find a broker 

Conduct your own research and find a reliable broker with affordable fees and commissions. Opt for a broker with excellent order execution speeds, responsive customer care and extra features like trading education. 

2. Set up a trading account.

Once you select your ideal broker, open a trading account on their platform. Vantage Markets is an excellent platform from trading nickel stocks CFDs and ETF CFDs.  

3. Pick your preferred nickel stock.  

Select a nickel stock of your choice and research its performance in the markets. 

4. Set up your trading strategy

Once you have all the information you need, create a solid plan around how to enter or exit markets. That may also include how to size your capital across all your nickel positions. 

5. Have a risk management plan

Use risk management features to protect your capital while trading. That may include take-profit and stop-loss orders. 

6. Monitor your position and close your trade

Now, keep tabs on all your positions as the market moves. If a trade goes in your favour, you may opt to exit by closing that trade to earn a potential upside. If it moves against you, exit the trade to prevent devastating losses. 

Final Thoughts

To recap, Nickel stocks are shares of companies that mine and process lithium. Just like lithium stocks, nickel stocks are essential for the evolution of electric vehicles. Nickel is equally essential in the stainless steel industry. Although you can trade nickel as a base metal directly, you can always use nickel stocks CFDs to gain indirect exposure to the metal. 

You can trade metals of different kinds with Vantage. Are you ready to participate in the green energy revolution with lithium? Trade lithium stocks CFDs on Vantage markets now.

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