Horizonte Minerals PLC, (LON:HZM,TSE: HZM), the nickel development company focused on Brazil, believes the nickel market continues to demonstrate compelling fundamentals.
In its results statement covering 2018, the company highlighted the continued reduction of nickel inventories on the London Metals Exchange, with levels now at six-year lows, while the upsurge in demand for electric vehicles (EVs) is likely to give a boost to the nickel price.
As might be expected of a pre-revenue exploration company, Horizonte made a loss in 2018. The loss before tax was £1.94mln, compared to a loss of £1.67mln the year before.
The explorer’s cash position is positive at £6.5mln.
“Having fallen from 470,000 tonnes to approximately 200,000 tonnes at present, nickel inventories on the LME have continued to drop and are now at their lowest level in five years. Significant new supply is required for the stainless-steel market which is growing at around 5% annually, with further additional new demand driven from the EV battery sector,” noted company chairman, David Hall.
“Whilst the physical number of EVs on the roads throughout the world remains relatively low at 3 million cars today, forecasts for the acceleration of adoptions of EV's vary from 20 to 40 million cars on the road by 2030, representing an estimated 10-fold increase. At present it is difficult to see where significant new supply to meet this demand is going to materialise making it a driving force behind the widely held views from industry professionals that nickel prices are anticipated to rise. The current consensus short term forecast for the Nickel price stands at $16,500/t Ni compared with a price of US$13,000/t at the date of this report,” Hall said.