Anthony discusses the recent move in nickel that followed the LME Week in London. The themes tend to change from year to year and this year electric vehicle battery metals were a core focus. Nickel sulfide was of major interest with a significant deficit being projected. Newer battery chemistries in development are increasingly reliant on nickel. The price moves are real and are currently factoring in actual demand that exists in the market today. The lithium market is also extremely tight. If you agree with the consensus view on E.V. penetration rates, then the cobalt is a market is already going into deficit. Copper is also attractive as there appears to be a deficit looming in 2019. This growth seems to be coming from improving worldwide economic conditions. 6% to 10% of future copper demand will come from electric vehicles. This doesn’t count any upgrades needed to the worlds electrical grids. He thinks large investment funds will be pushed towards copper and the price could exceed that of the last commodity supercycle. The nickel market is bifurcated into two classes. There is low-grade class 2 nickel called pig iron this is relatively abundant. Class 1 nickel sulfide deposits are rarer and are what the chemical industry needs for batteries. These deposits are fewer in number and far more constrained. Anthony discusses the various small, large and mid-cap companies that he likes in the nickel space. He prefers the leverage you get from small-cap companies, but there are greater risks. He feels the best strategy is to invest broadly across the space.
