Nickel prices must rise to meet battery demand: AABC (Argus – January 28, 2019)

Higher nickel prices are required to incentivise supply of nickel sulphate for electric vehicle (EV) batteries, particularly given lower cobalt prices, delegates heard today at the Advanced Automotive Battery Conference (AABC) in Strasbourg, France.

Supply of nickel increased by 7pc last year to about 2.19mn t, but demand increased by 8pc to 2.33mn t, increasing the deficit to 147,000t, from 131,000t in 2017, said Denis Sharypin, head of market research at Russian producer Norilsk Nickel.

The battery sector accounted for 124,000t of consumption last year, and while overall nickel demand is expected to increase at a compound annual growth rate (CAGR) of 5pc to 2025, demand from the battery sector is estimated to climb at a CAGR of 18pc over the same period.

But there are concerns about the availability of class 1 nickel, which is required for the production of nickel sulphate used in battery chemicals. Around 70pc of nickel output is used in stainless steel production, which is still growing. And around 60pc of nickel is produced from laterite rather than sulphide ores.

The nickel market will remain in deficit in the coming years, and Indonesia is likely to reinstate a full ban on exports of nickel ore from 2022, further reducing supply, Sharypin said.

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