For several years, there was a surge in nickel prices, primarily been fueled by the rising demand in the battery sector. Lithium-ion batteries, critical in the production of electric vehicles, have been a major factor in the rising nickel price. The robust demand for lithium ion batteries is set to increase as the EV market continues to grow. This, in turn, was projected to boost nickel prices further, creating a favourable environment for nickel producers. Or so it was thought.

But after nickel prices on London Metals Exchange (LME) peaked at over US$30,000 per tonne, prices crashed and have remained depressed, even as other battery metals have recovered. There is a general oversupply of nickel in the world as EV sales are weaker than expected. Also hurting matters was rapid growth from nickel producers in Indonesia, many of which are backed by Beijing.

This hit many nickel stocks on the ASX. Amongst them:

• IGO (ASX:IGO) had write off just about all of the $1.3bn it paid for Western Areas just 18 months ago
• Panoramic Resources sank into administration just prior to Christmas 2023. Granted, nickel prices were only part of them problem, with bad machinery and bad weather also hurting the company.
• Mincor Resources was acquired for $760m by Andrew Forrest’s private nickel explorer Wyloo Metals. Although it suffered a blow in the form of BHP refusing to take ore because it had too much arsenic.

That was just the producers. If you thought they had it bad, spare a thought for explorers trying to drum up investor attention amidst safer alternatives like gold stocks.