Nickel is one of the materials expected to win from the coming electric vehicle (EV) revolution. Electric vehicles will be powered by lithium-ion batteries, which need cobalt and nickel. Indeed, as cobalt’s potentially fragile supply chain comes under ever-increasing scrutiny, battery-makers are likely to try to use less of the stuff in favor of more nickel.
So it might seem strange that the world’s largest nickel producer is actively curtailing capacity at mines and refineries. Yet that is precisely what Brazil’s Vale is doing, removing around 100,000 tonnes of supply over the next two years.
While “everyone knows there are great opportunities” for nickel in the EV sector, “prices are not there”, according to Vale Chief Executive Fabio Schvartsman, speaking at an investor event last week.
It’s a wake-up call for the nickel sector. The future may be electric and bright, but the present reality is a dull one of low prices and legacy stock overhang.
The prices of lithium and cobalt have gone stratospheric over the last year or so as supply chains struggled to catch up with the new demand driver that is the EV.
It took a while for the world to realize that nickel was the third key metallic input into the new generation of batteries, but when it did, last month, the nickel price jumped to a two-year high of $13,030 per tonne on the London Metal Exchange (LME).