EV nickel demand increasing at supercharged pace May 18, 2022
“Global nickel usage surged by an extraordinary 16.2% last year on the back of booming demand from both the dominant stainless steel and fast-growing battery end-use sectors.
The result was a supply shortfall of 168,000 tonnes, the largest production deficit in at least a decade, according to the International Nickel Study Group’s latest statistical snapshot on the market.
The group expects usage to grow another 8.6% this year, exceeding the 3.0 million tonne mark for the first time ever.”
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“How long such strength can last is a moot point with Chinese [stainless steel] production sliding further in the first months of this year as lockdowns crimp demand for stainless-steel-containing consumer durables.
Fortunately for nickel demand, stainless slowdown will be offset by fast-rising offtake from the electric vehicle (EV) battery sector.
Not all batteries use nickel, particularly in China, but the scale of the EV roll-out is such that demand for the metal is still increasing at a supercharged pace.
Adamas Intelligence estimates that 18,610 tonnes of nickel were deployed onto roads globally in new electric vehicles in March, a 50% increase on March 2021. (‘Monthly Battery Raw Materials Deployment’)
Goldman Sachs forecasts nickel usage in the EV battery sector to increase by 62% to 285,000 tonnes this year and by another 26% to 358,000 tonnes in 2023. (“Nickel’s Class Divide”, April 28, 2020)”
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“With EV sales rising and nickel demand increasing, not everyone is convinced Indonesian supply will close the gap.
Goldman Sachs concedes that Indonesia will drive a surplus of lower-grade Class II nickel to the tune of 112,000 tonnes this year but forecasts a wider 196,000-tonne deficit of Class I material.
The bank is a bullish outlier in the nickel market with a price target of $42,000 per tonne over a 12-month time-horizon based on a net global supply shortfall of 85,000 tonnes.
Within the context of a three-million-tonne market Goldman’s assessment of market balance isn’t so far from the INSG’s estimate of modest 67,000-tonne surplus.
The devil of the calculation is in the detail as the nickel market continues to evolve into two increasingly distinct streams, one defined by traditional stainless steel usage and one by nickel’s part in the global drive to decarbonise.
Surplus or deficit? In nickel’s current fractured state it could be both this year.”
https://www.mining.com/web/column-nickel-demand-boomed-in-2021-this-year-it-will-be-supply/