Global finished nickel demand is forecast to grow 15% in 2021 to reach 2.7 million tonnes. Importantly, nickel demand is expected to continue to grow, hitting 2.9 million tonnes in 2022, and 3.0 million tonnes in 2023.
This was reported by the Australian Government’s Department of Industry, Science, Energy and Resources (DISER).
According to the report, stainless steel still constitutes the majority of global demand for nickel, despite the burgeoning EV sector. Stainless steel production is estimated to increase by 15% year-on-year for 2021, supported by government stimulus spending. However, it is likely to taper towards around 5% a year in 2022 and 2023.
At the same time, DISER said that expectations of future nickel consumption growth are primarily driven by the battery sector.
"Accelerating demand for electric vehicles, as part of government stimulus measures to offset the impact of the COVID-19 pandemic, combined with ongoing moves in decarbonization, is driving increased demand for nickel," the authors of the report noted.
Demand for nickel for batteries is forecast to double over the outlook period, as battery factories come online both inside and outside of China.
DISER added that currently, batteries account for about 6% of primary nickel consumption.
However, rising EV penetration rates, combined with increased use of nickel in batteries, is projected to see this reach 14% within three to five years.
This will likely be driven by European Union demand, as well as in China and the US, DISER said.
Additionally, local EV value chains in populous nations such as India and Indonesia, are likely to drive consumption beyond the forecast period.