Stronger Nickel Prices to Benefit Vale, BHP Billiton

Posted on April 20, 2014 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

Vale, the second largest producer of nickel, is expected to be one of the beneficiaries from a recovery in nickel prices. The company is expected to increase production at Onca Puma, Brazil, having suspended the project for one year due to technical glitches. The plant was running at about 62% of its nominal capacity of 25,000 tons a year by December.

Stronger nickel prices will also help BHP Billiton as the company looks to offload non-core assets. BHP plans to focus on copper, iron ore, coal, and petroleum as part of its simplification strategy. Earlier this month, the company had said that it is continuing to study the next phase of simplification, which includes structural options. With the outlook for nickel prices strong, it will be much easier for BHP to sell or spin off its nickel assets.