Glencore Plc is seeing the best market conditions for nickel in at least a decade, and electric cars are barely playing a part yet.
The miner and trading giant expects nickel’s 2017 deficit at 170,000 metric tons — one of the biggest in years and more than most market estimates — driven by a 9 percent demand increase from the steel industry, the top user. The market is tightening amid falling stockpiles and rising premiums for physical deliveries, said Owen Gibbs, a senior nickel trader at Glencore.
Prices recently hit a two-year high amid forecasts from banks including Goldman Sachs Group Inc. and Bank of America Corp. that an electric-vehicle boom will boost demand for battery metals in the next decade.
Glencore also expects a strong lift in nickel consumption from electric cars, but not materially until 2020. Once that happens, miners will struggle to keep up with faster usage, Gibbs said.
“The battery sector overlays on a really positive market outlook for nickel, and it’s forecast to be transformational from 2020 onwards,” Gibbs said at a Metal Bulletin conference in Lisbon on Monday. “Where will the primary nickel come from?”
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