Nickel the new market star – by Peter Kerr (The Age – April 10, 2014)

Nickel’s transition from laggard to market darling is continuing apace, with a perfect storm of factors driving positive sentiment for the metal.

Australia’s three pure-play nickel stocks are surging this week on the back of a rising commodity price, elections in Indonesia and even a hint of takeover speculation.

The fun started in January, when one of the world’s major nickel suppliers, Indonesia, imposed a ban on exports of some unprocessed types of nickel, in a bid to try and lure miners to build processing facilities on Indonesian soil.
After years in the doldrums, the reduced exports sparked a rise in nickel prices that is still underway three months later.

With a 20 per cent rise under its belt since January, the benchmark nickel price (measured at the London Metal Exchange) is now at its highest price in 54 weeks.

LME Nickel for three month delivery was $16,718 per tonne this morning, which equates to about $US7.58 per pound in the local parlance.

The surge has seen the ASX’s biggest pure-play nickel producer, Western Areas, almost double in size from $1.97 per share in early December to $3.68 today.

Another local nickel miner, Panoramic Resources, picked the perfect time to announce a new brownfield nickel discovery, and has duly more than doubled from 23¢ to 53.5¢ since January 10.

The company boasting Australia’s best untapped nickel discovery, Sirius Resources, has also benefited from the improved outlook, having risen from $1.95 in early December to $2.52 today.

Some quick money has also flowed into Sirius and Western Areas in recent days, amid speculation that one or both could get tied into the change of ownership that is expected to occur soon at BHP Billiton’s nickel assets in Western Australia.

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