March 24th, 2022 | 13:12 CET
Power Nickel, BYD, Alibaba - Prices continue to rise
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
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Power Nickel - High-quality nickel for electric cars
Nickel is in hot demand on the stock exchange. Demand has been so strong due to the Russia-Ukraine conflict that there was a short squeeze on the London Metal Exchange (LME). A short squeeze describes a rapid increase in value by traders who want to dump their positions quickly because they have bet on falling prices. The LME even suspended trading in nickel for a short time. Speculators were thwarted. The London Metal Exchange is the most important trading center for metals - all other trading centers worldwide were guided by its prices. The LME three-month nickel price CMNI3 fell by 13.9% to USD 27,020 per ton shortly after the market opened on Tuesday, before recovering to around USD 28,300 (-10%) less than an hour later.
Nickel is used in particular in the electric car industry. Not all nickel is suitable for this, and there will still be significant shortages due to the sanctions against Russia. All the more encouraging, then, is that one of the largest quality nickel deposits is emerging in Canada. And this area - known as NISK - is owned by the publicly-traded company Power Nickel (PNPN).
"On the world market, a distinction is made between Class 1 nickel and Class 2 nickel. The latter is not suitable for use in batteries for e-cars. Power Nickel's NISK project represents Class 1 nickel and will benefit from all the electromobility and energy storage trends," explains CEO Terry Lynch.
The reason for the automotive sector to focus on nickel: Class 1 nickel contributes to longer battery life due to its higher energy density and greater storage capacity, leading to lower costs at the same time. Therefore, a valuable material for carmakers and more range for the e-car driver.
BYD - Deal with Nvidia for autonomous driving
Autonomous driving seems to be getting closer as a vision of the future. Who, if not BYD, is in a position to make this dream come true. After all, BYD stands for Build Your Dreams. At the AI Developer Conference GTC on Tuesday, Nvidia announced the new cooperation with the third largest EV manufacturer in the world. BYD plans to start using Nvidia's Hyperion platform and Orin chip in early 2023. Nvidia's Drive Hyperion platform includes both software and hardware AI solutions for autonomous driving.
BYD is a pioneer in the electric car industry and has been using rechargeable nickel batteries for its cars since 2008. BYD is also well positioned internationally in the larger vehicle market. Once again this week, the Company launched more zero-emission buses in the United States. In sunny California, 57 more BYD buses are now on the road, taking environmentally conscious US Americans to and from work. According to the US Department of Transportation, each zero-emission BYD bus built in America avoids about 1,690 tons of CO2 during its 12-year lifespan. That is the equivalent of eliminating 27 exhaust-emitting cars. And all those buses have rechargeable batteries in them. Value investing legend Warren Buffett still holds 7.9% of BYD through Berkshire Hathaway.
Alibaba - Share buyback causes share price jump
Alibaba shares rose by a whopping 11% on Tuesday. The Chinese e-commerce giant announced that it would increase its share buyback program to USD 25 billion from the previous USD 15 billion. The Company has extended the life of the plan until March 2024. For investors, share buybacks are a good thing. The Company is signaling that it believes its shares are a lucrative investment. It is safe to assume that the board members have information that leads them to take this step. From the outside, it may have to do with the Company's previous neutrality towards Russia and Ukraine.
As of March 18, 2022, the Company acquired 56.2 million American Depositary Shares with a total value of approximately USD 9.2 billion under the previously announced share buyback program. An American Depositary Share (ADS) is a share in a non-US company held by a US depositary bank that investors can purchase.
Alibaba.com was founded in 1999 and is the leading platform for global wholesale trade. The B2B trading platform features billions of products in over 40 major categories, including consumer electronics, machinery and apparel. Buyers of these products are located in over 190 countries and regions. They exchange hundreds of thousands of messages with sellers on the platform every day. In 2021 alone, the Company served approximately 1 billion consumers in China and 300 million worldwide.
Demand for nickel to make high-performance electric car batteries continues to grow. That makes it all the more valuable to strategically position one's portfolio, even in light of political upheavals around resource allocation. Canada has one of the largest nickel deposits with its publicly-traded Company, Power Nickel. Carmakers like BYD continue to put battery-powered and thus emission-free vehicles on the road. And if you are happy about the 11% jump in Alibaba's share price, you might already be able to configure your next electric car.
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