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Strong Global Cues Puts Nickel Futures On A Bright Spot

Despite nickel prices falling recently in the market, analysts are seeing strong global cues that place the base metal on a positive light in the next few weeks or months.

For one, Global Ferronickel Holdings (formerly Southeast Asia Cement), one of the largest producers of nickel in the Philippines, has announced its intentions to increase the company's iron ore production to as much as 11%, totaling 4.9 million tonnes. According to Reuters, this is expected to boost the export of nickel to the rest of the world, with the Philippines having taken over Indonesia as the biggest supplier of ore to China in 2014. China's numbers totaled to 36.4 million tonnes of nickel import.

Per another report from Stockhouse, Raymond Goldie, Vice-President of Commodity Economics with Salman Partners and one of the most trusted commodities analysts in Canada, said that the long-term view on base metals is well and good. This is especially true for copper, nickel, and zinc.

Goldie said that base metals are currently undergoing a "super cycle" since 2004, which meant that the prices of metals have been steadily increasing over the years. The weakening that the market has seen lately though is part of a "mid-cycle trough," and base metals are sure to rebound again in the future.

The one to watch is nickel, for it has the brightest outlook out of all metals. The Indonesian ore ban has shifted a lot of things in the world economy, which prompted Goldie to say that "the world needs new nickel mines."

This is where Amur Minerals Corporation (LSE:AMC.L) comes up during discussions on nickel discovery. The Russian mining company is almost set to explore and develop its flagship Kun-Manie project, whose five drilled deposits account for 650,600 tonnes of nickel and 178,400 tonnes of copper. Approval for the license is already on its last stage and submitted for the approval of Prime Minister Dmitry Medvedev.

Shares of Amur Minerals Corporation is currently at 9.13 on last close. The market cap is at 39.18 million, based on 434.19 million outstanding shares. The 52-week range is from 2.29 to 13.47.

A nickel company recommended by Goldie is Sherritt International Corp. (TSE:S), which refines nickel and cobalt from lateritic ores and operates in Canada, Cuba, and Madagascar. The corporation's stock soared last December after the US government lifted the embargo and reestablished its ties with Cuba.

Sherritt is said to be the largest independent producer of energy in Cuba, and its nickel and cobalt production there amounts to 38,000 tonnes annually. Shares of Sherritt International is currently at 2.14 on last close. The market cap is at 635.30 million, based on 297.23 million outstanding shares. The 52-week range is from 2.00 to 4.90.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.