Natural Resources
Alchemist Issue 40
16 February 2023
Nickel – A Fourier Analysis of price cycles
The commodity price cycle is a constant theme for discussion and a key consideration for all mining industry stakeholders as a critical driver of investment decisions. However, with the Covid-19 pandemic and significant global government intervention leading to the compression of the most recent credit cycle, has nickel, a historically cyclical commodity, maintained its pricing cycles of previous decades?
The Alchemist has conducted a Fourier Analysis of long-term nickel price forecasts to examine the impact of the recent events against the backdrop of nickel’s increasing importance to the global energy transition. It will also be referenced against consensus forecasts, which are understandably heavily influenced by short term events and perspectives. This analysis adds to The Alchemist’s previous Fourier Analysis of the copper market (Issues 36 and 27).
The key takeaways from this report include:
- The analysis suggests that the nickel price is approaching the top of the commodity cycle and an extended downturn is expected, in line with consensus forecast
- Whilst nickel remains cyclical, there does not appear to be one dominant super-cycle, but rather, four dominant cycles that have driven nickel prices
- Despite this, real nickel prices are expected to remain above the long-term trend as global demand for nickel as a battery feedstock continues to drive a structural demand shift
To access the full report click here.
Kevin Yan
RFC Ambrian Executive
kevin.yan@rfcambrian.com
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