Weekly Mining Commentary

Weekly Mining Commentary

We remain firm on our outlook for an economic recovery in the second half, based on the rollout of vaccines, and improving consumer sentiment.

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Weekly Mining Commentary

Four of the seven global equity indices we track retreated in the past week (orange bars).After several consecutive weeks of declines, India and Germany experienced a surge in new cases of COVID-19 last week. Eight of the top 15 hardest hit nations reported a WoW increase in new cases last week.

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Weekly Mining Commentary

Potential Breakthrough for Nickel Supply
A noteworthy event last week was a 13% decline in nickel prices. This was a result of an announcement by China’s Tsingshan Holding Group (the world’s largest stainless steel producer) that they have developed a new technology/manufacturing process to convert nickel pig iron into a product suitable for EV batteries. We consider this to be a major development as, until recently, only Class 1 (sulphide ore), which accounts for 50% of nickel supply, was considered to be suitable for EV batteries. Due to their higher iron content and impurities, Class 2 nickel (ferronickel and nickel pig iron) was not considered to be suitable. Tsingshan’s new process could potentially double the supply of nickel for EV batteries, and ease concerns of a nickel shortage for batteries. Last month, Elon Musk had stated that nickel supply was a major concern. We had expected this news to result in a larger drop in nickel prices.

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