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Beginner’s Guide to Nickel Investing

Futures trading on exchanges such as the London Metals Exchange (LME) are commonplace amongst institutions but for the retail trader, Contracts For Difference (CFDs) are a popular choice. A list of the world’s top metal mining companies wouldn’t be complete without including BHP Group. This is one of the largest base materials producers around, including a massive nickel extraction and refining operation, so BHP Group is a good place to start a search for nickel stocks. There are several important key metrics to consider regarding an investment in nickel. If you are going to invest in nickel mining securities, it’s important to look out for high leverage ratios. If the ratios of debt to assets or debt to equity are too high as compared to the rest of the industry, that can lead to possible bankruptcy.

Firebird Metals

The rationale for this policy was a desire by the government to support the domestic smelting industry. Ultimately, budget deficits in Indonesia led to a resumption of exports. The high iron content of lateritic ores makes smelting the preferred method of nickel extraction. Lateritic ores have high moisture content that requires drying the ores in kiln furnaces. By the late 1800s, iron and steel manufacturers discovered they could strengthen traditional steel by creating alloys with nickel. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

The bottom line: Nickel producers will likely benefit from EV growth but are still exposed to commodity market swings

  1. It was already on a sustained up-trend for nearly three years, but nickel’s sudden price surge in 2022 has made the base metal too attractive to the retail investor community to ignore.
  2. The growth could lead to higher prices for nickel, benefitting nickel-related stocks and investors in the metal.
  3. The aerospace industry prizes refined nickel for its resistance to corrosion and uses it in spades as a component of superalloys.
  4. For instance, the collapse of the Eastern Bloc led to significant nickel oversupply and a plummet in the metal’s price that was not corrected until the early years of the 21st century.
  5. As briefly mentioned above, supply and demand constitute a large influence over nickel prices.

These intermediate products contain between 40 and 70% nickel, but each requires further refining. Although sulfidic ores are more expensive to mine, separating the nickel from these ores is cheaper than extracting nickel from lateritic deposits. Additionally, sulfidic ores generally contain other valuable minerals that can be extracted during nickel production.

VanEck Vectors Nickel ETF (GMET)

“In nickel, we are performing as planned, which includes the continued transition of the Voisey’s Bay mine to underground and the rebuild of the Onca Puma furnace 1 later this year. We are accelerating breakthrough iron ore solutions to deliver the high-quality required by a decarbonizing world. The stocks highlighted in this article all pay dividends to stockholders. If you’re interested in other stocks that pay dividends, check out our list of the best long-term dividend stocks.

Final Word On Trading Nickel

Nickel investing, and investing in other base metals like zinc, iron, aluminum and uranium, is different from investing in precious metals like gold and silver. Base metals’ prices move with the economy; precious metals’ prices often move in the opposite direction of the economy. adventure capitalist: the ultimate road trip If you want to include nickel in your investment portfolio, consider working with a financial advisor. Nickel investing, and investing in other base metals like zinc, iron, aluminum and uranium, is different from investing in precious metals like gold and silver.

Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money. A casual investor does not want to get involved with nickel futures due to the complexity of the commodities and futures market.

The company currently has a strong balance sheet, although investors need to be mindful that a dividend cut is to be expected if commodity prices move to the downside. As of January 2024, Anglo American had a market capitalization of just above $31 billion. With its stock trading nearly -46% down in the past 12 months, it could prove to be a good long-term investment, especially if we consider the stock traded much higher in the past. Vale is a Brazilian mining company that is the world’s largest producer of iron ore and nickel. The company has a market capitalization of over $80 billion and operates mines in Brazil, Canada, Australia, and Mozambique.

Nickel is found in a number of different places throughout the world, including Canada, Russia, and Indonesia. It is found in laterite and magmatic deposits and is usually mixed with other metals, including iron and cobalt. If you’re seeking a low-risk investment option, then investing in this metal ETF may be the right choice for you. By investing in a Nickel ETF, you are giving your portfolio exposure to this critical metal. Not to mention, nickel tends to move with the market, making it a less risky investment option. Nickel is a non-renewable resource, meaning it can’t be replaced over time.

Investing in individual nickel stocks isn’t for the faint of heart. The pandemic has put severe stress on global supply chains, and demand for tech devices (everything from semiconductors to electric vehicles) is soaring. Add in Russia’s invasion of Ukraine, and the price of many elemental materials is quickly rising. When you’re planning a nickel trade, turn on indicators such as moving averages, relative strength index and Bollinger bands. Besides these technical indicators, a range of news events can have a large impact on nickel prices – read up on the main factors influencing the metal’s supply and demand. At the same time, trading nickel has had a bumpy ride in recent years with some periods of extreme volatility.

This is a great way to get exposure to the commodity’s price without purchasing the physical nickel. Before we get started, we’d like to inform you that it’s essential to conduct your own research before investing in an ETF. There are many different funds to choose from, so make sure you find one that aligns with your investment goals.

If you’re not familiar with the market, you may end up losing money. Anyone who is exposed to nickel can be at risk for health problems. Investing in nickel is a good choice if you’re looking for a sustainable investment. However, it is crucial to understand that Nickel investments are great in tandem with other assets. Nickel is used in the automotive industry because it is solid and durable.

With EV production rapidly on the rise, nickel could be a top commodity investment during the next decade. Anglo American is certainly worth considering for investors that are looking to get exposure to nickel. The company has two ferronickel production sites, which are both located in Brazil. In February 2023, Anglo American made a $24 million investment into the Canada Nickel Company. Anglo American is a multinational mining corporation headquartered in London. Anglo American is the world’s leading producer of platinum, and is also engaged in the mining of copper, nickel, iron ore, and other materials.

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