Investing in Nickel Stocks

Roberto Rivero

Nickel is an essential component in the production of stainless steel which, in turn, has a great number of applications, such as construction and consumer goods. Consequently, demand for stainless steel - and, therefore, nickel - is often driven by global economic growth.

However, nickel is gaining an increasing amount of demand due to the global energy transition, as it is an important component in the manufacturing of electric vehicles (EVs). Keep reading to learn more about investing in nickel mining stocks and to discover some of the best nickel stocks to watch in 2024.

Why Invest in Nickel Mining Stocks

Although nickel is still mostly used for stainless steel production, its demand for EV production is rising. In 2022, 10% of nickel demand was for EV battery production. Whilst still a small proportion, this was up from just 2% five years previously, in 2018.

Despite the batteries being named lithium-ion batteries, the fact is that lithium actually makes up a relatively small proportion of the overall battery, with nickel often being the largest component. Consequently, as demand for EVs increases, demand for nickel is likely to increase as well.

However, due to its scarcity, high price and environmentally damaging mining process, many EV producers are working towards hopefully using batteries which are free of nickel in the future. Nevertheless, demand for nickel is still forecast to increase by 60-70% over the next two decades, as the world aims to achieve net zero emissions.

As demand for the metal increases, nickel mining companies could be in line to benefit. So, with this in mind, what are the best nickel mining stocks to watch?

The Best Nickel Stocks to Watch

Rather than focusing on a single commodity, most mining stocks are diversified companies, producing a number of different types of metals.

Whilst this may disappoint those who are looking to invest exclusively in nickel, it can be beneficial from a risk management perspective, as the success of these companies is not tied to a single commodity. In the following sections, we will take a quick look at 4 well-diversified nickel stocks.

Vale SA

Brazilian mining company Vale SA is the second-largest producer of nickel in the world, also producing iron ore and copper. In 2022, nickel sales contributed 15% of the company’s total revenue, the vast majority of which was generated by iron ore.

As with many mining companies, Vale SA returns value to its shareholders through dividend distributions and share buyback programmes. In 2022, the nickel stock repurchased $6 billion of its own shares and, at the time of writing, it has a dividend yield of 7.7%.

Glencore

Although Glencore is one of the largest nickel producers in the world, nickel sales only accounted for 5% of total revenue in 2022, with coal the largest contributor at 35%.

However, Glencore might be an interesting proposition for those keen to take a wider position on the global energy transition.

As well as being one of the largest producers of nickel in the world, it is the largest producer of cobalt, another important component of EV batteries, and one of the world’s leading producers of copper, a metal which will be important in the global energy transition.

In 2022, Glencore repurchased $3.6 billion of its own shares and, at the time of writing, has a dividend yield of 9.2%.

Depicted: Admirals MetaTrader 5 Glencore Weekly Chart. Date Range: 21 May 2017 – 24 November 2023. Date Captured: 24 November 2023. Past performance is not a reliable indicator of future results.

Eramet

All the nickel stocks on our list produce the metal alongside a number of other commodities. Whilst Eramet does not produce the most nickel of the companies listed in this article, its production makes up a far larger proportion of its overall business than the others.

In 2022, nickel sales accounted for 28% of Eramet’s total revenue, meaning that this nickel mining stock may appeal to those who are looking to gain as much exposure to the metal as possible.

Furthermore, Eramet has invested heavily on a lithium mining project in Argentina, which will begin production in 2024. Lithium being another metal which is a key component in battery production. At the time of writing, Eramet has a dividend yield of 4.8%.

Depicted: Admirals MetaTrader 5 – Eramet Weekly Chart. Date Range: 21 May 2017 – 24 November 2023. Date Captured: 24 November 2023. Past performance is not a reliable indicator of future results.

BHP Group

BHP is the largest mining company in the world by market capitalisation and one of the world’s leading producers of nickel. Nickel accounted for less than 4% of total revenue in the year ended 30 June 2023, with iron ore the biggest contributor at 46%.

However, it plans to invest more than $90 million over the next two years in its nickel mining operation and, unlike many other nickel stocks, the majority of its nickel (85%) is sold to the EV battery industry rather than for use in stainless steel production. At the time of writing, BHP has a dividend yield of 5.4%.

Depicted: Admirals MetaTrader 5 – BHP Weekly Chart. Date Range: 7 May 2017 – 24 November 2023. Date Captured: 24 November 2023. Past performance is not a reliable indicator of future results.

How to Invest in Nickel Stocks

With an investing account from Admirals, you can invest in the nickel mining stocks highlighted in this article. In order to do so, follow these steps:

  1. Open an Invest.MT5 account and log in to the Dashboard.
  2. Find your account details in the Dashboard and click ‘Invest’ to open the web trading platform.
  3. Search for the nickel stock you want to invest in and click the symbol to open a price chart.
  4. Press ‘Create New Order’, enter the number of nickel shares you want to purchase and send your order to the market.
Depicted: Admirals MetaTrader WebTraderVale SA H1 Chart. Date Captured: 24 November 2023. Past performance is not a reliable indicator of future results.

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Investing in Nickel – FAQ

Can I Invest in Nickel?

Yes. There are a number of ways in which investors can gain exposure to nickel without buying the physical metal, which would incur a number of logistical issues. Some of the most common methods include Exchange-Traded Funds (ETFs), futures contracts and investing in nickel mining stocks.

Where Is Nickel Mined?

In 2022, the top five nickel producing countries were Indonesia, the Philippines, Russia, New Caledonia and Australia.

Where Is Most Nickel Mined?

Indonesia is by far the largest producer of nickel in the world, accounting for almost 50% of total global production in 2022.

How Much Nickel Does Russia Produce?

In 2022, Russa accounted for around 7% of total global nickel production.

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The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:

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  • The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
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