Is nickel worth your dollar?

The nickel sector faces low prices, falling profits and growing pessimism. Gaurav Sodhi explains why that’s a good thing and reviews the sector.

For the canny resource investor, the time to buy resource stocks is when commodity prices are low, industry profits scarce and pessimism supreme. That was the thinking behind our Speculative Buy call on Alumina, for example, on 5 Oct 11 (Speculative Buy – $1.44).

The nickel industry also displays a similar combination; low prices, rare profits and exceptional pessimism. The world’s largest nickel producer, for example, Russian giant Norlisk Nickel, estimates that half the global industry is in the red.


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