2Q18’s Outperformance: Thanks to Soaring ASP
INCO enjoyed the net profit of USD22.5 million or growing by 247.2% y-y and 11.0% q-q. Thanks to the soaring ASP to USD 10,880/ton or edging up 10.0% q-q and 44.3% y-y. The uptrend of higher global nickel prices is a logical takeaway for the soaring ASP. We project that the global nickel prices likely tops USD14,000-14,750/ton in 2018-2019 in light of the growth of 5%-7% in demand for China’s steel.

Stainless Steel’s Dominance Lingering Still
We oversee that 70% of global nickel supply is currently used by the steel industry, while the remaining 5% is used by the Electric Vehicle (EV) battery industry—making use 99% nickel content. Despite the contrast nickel supply, the demand for automotive EV battery likely snaps higher within the long-term period.

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