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As the energy transition drives surging demand, boosting supply will be key for copper and nickel
04 April 2022
Global nickel demand growth: the future is batteries
While stainless steel will continue to be the main first use for nickel, the major engine of demand growth over the next two decades will be batteries. From only 7% of the total market in 2021, we expect battery use to grow to 40% of nickel consumption by 2040. That will push nickel demand to double in size to six million tonnes per year.
Our estimate for nickel use in batteries has increased by 900,000 tonnes in the past six months, mainly due to greater net zero commitments from governments and automakers. The increasing importance of energy storage to enable wider use of renewables will also be an important factor in driving demand.
Our current forecast indicates the need for an additional 1.65 million tonnes of nickel to be brought into production between 2026 and 2038. Given that an additional 1.8 million tonnes of nickel will have been brought online between 2011 and 2023, that ought to be feasible.
However, the vast majority of new capacity development over the past decade has been in Indonesia and has had significant environmental side effects. Recent pledges by Indonesia to reverse deforestation and cease coal-fired power station development would make repeating these growth rates extremely challenging.
There is a growing focus on using locally-produced raw materials in Europe and the US.