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“Misunderstood” Nickel Could Rally In 2013

In December, world's largest nickel producer, Norilsk Nickel (LSE:MNOD), experienced its largest drop in a month due to investors betting that the company will pay lower dividends than expected. Bloomberg reported that Norilsk stock retreated up to 3.3 percent before closing down 2.1 percent on the Moscow stock exchange.

Number-one iron ore producer Vale said last month that it will take a US$2.85-billion pretax writedown on Onca Puma. The announcement came after the Brazilian ferronickel operation was stopped in June and nickel prices declined. Vale also announced a before-tax impairment charge of $1.3 billion at Hydro, a Norwegian aluminum producer in which Vale has a 22 percent stake.

The merger of Glencore International (LSE:GLEN) and Xstrata (LSE:XTA) could result in more M&A activity in the West Australian nickel sector, reported The West Australian newspaper, quoting the CEO of Western Areas (ASX:WSA) — the country's third-largest nickel producer. Dan Lougher said the $31-billion tie up announced in November "could be the catalyst for a wave of acquisition activity in the WA nickel sector this year, with the new global giant primed to gobble up a number of local assets."

 

Securities Disclosure: I, Andrew Topf, do not hold equity interests in any of the companies mentioned in this article.

Related reading: 

What Lies Ahead for Nickel

Nickel Outlook Falls Victim to Oversupply

“Misunderstood” Nickel Could Rally in 2013 from Nickel Investing News

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