The long-term nickel floor price has ‘turned the corner’ and will continue to rise over coming decades, according to resources adviser Martin Pyle, Principal of Perth-based Martin Pyle Consulting.
The forecast was made at the first day of the Paydirt 2009 Australian Nickel Conference, currently being held in Perth.
“It is clear the global financial crisis impacted construction and transport, major factors in the associated reduction in stainless steel demand and therefore nickel in the short- term,” Pyle said.
“Forecasts of 500,000 tonnes a year in new nickel demand by 2020 now look conservative.
“I am expecting that the long-term price, although influenced by the short-term spot price, will be in the top end of the range of between US$6.00 — 7.50 per pound — and that does not fully account for the emergence of a new super cycle driven by demand growth from China.”
According to Pyle, the firmer price will also be underpinned by increasing evidence of the importance of nickel in emerging new alternative energy forms such as nuclear, solar and wind.
“All of these have strong elements of nickel within their project componentry,” Pyle said.
“Nickel also has the added appeal of high recyclability and in every sense, is the ‘metal of the future’.”
He added that nickel laterites — although continuing to be a dilemma for many new project owners with a history in Australia of false project starts and supply difficulties — were here to stay in the nickel supply mix.
“They will come in and out of the sector but are generally here to stay along with nickel sulphides, in the final nickel market mix,” Pyle said.
The forecast comes as the Proponents of the proposed $2.23 billion Wingellina nickel laterite project in Central Australia say it has the potential to generate a throughput of around 40,000 tonnes of metal concentrate per annum.
Metals X Limited’s General Manager — Central Musgraves Project, Paul Cmrlec, said the Company was on the verge of submitting initial environmental approval applications for Wingellina, located in the Central Musgrave region.