LONDON, Oct 30 (Reuters) – Has nickel lost its electric buzz? Bull spirits had been galvanised by the potential boost to demand from the electric vehicle revolution. Nickel is expected to be one of the winners in the battle for more efficient batteries.
The price of nickel on the London Metal Exchange surged by 63 percent between October 2017 and April 2018, hitting a three-year high of $16,690 per tonne. It is now trading at $11,750.
Trade war anxiety has played its part in the price fall. But nickel has its own worries. Assumptions as to how both nickel’s price and supply chain would need to adapt to the new electric demand driver have just been upended.
Step forward Tsingshan Holding Group, the Chinese steel giant that is already disrupting the stainless steel supply chain and is now preparing to do the same to nickel. And it isn’t good news for nickel bulls.
THE GREAT INNOVATOR
Tsingshan is part of a consortium of Chinese companies, which last month announced their intention to produce battery-grade nickel and cobalt in Indonesia. The group includes lithium battery heavyweights Contemporary Amperex Technology and GEM Co. Ltd..
Tsingshan will supply the nickel and operate the first-stage processing to nickel hydroxide intermediates that can then be converted into nickel sulphate, the nickel form of choice for lithium-ion battery makers.