China has turned the nickel market on its head after the world’s biggest stainless-steel producer, Tsingshan Holding Group, this week agreed to supply about 100,000 tonnes of matte (containing approximately 65-75% nickel) to Huayou Cobalt and battery materials maker CNGR Advanced Material.
The news signals that the mainly Chinese-funded nickel pig iron (NPI) producers in Indonesia are now looking at making nickel matte, essentially giving the battery-materials manufacturers a new product to plug into their processes.
The market response was not pretty. London’s nickel prices fell nearly 9% on March 4 and in Shanghai dropped the most in nine months. The three-month nickel contract on the London Metal Exchange dropped as much as 8.5% to US$15,945 per tonne, its most significant intraday loss since December 2016.
According to Bloomberg data, the most-traded June nickel contract on the Shanghai Futures Exchange ended 6% lower at US$20,180.61 per tonne, posting its most significant intraday loss since May 2020.
Ironically, nickel price benchmarks were trading at a six-year high as recently as the last week of February on expectations that swelling demand from the electric-vehicle sector is set to create a substantial shortage in nickel suitable for EV batteries.
For the rest of this column: https://www.northernminer.com/commentary/has-china-shattered-battery-nickels-supply-chain-bottleneck/1003828913/