Strike at Vale’s Sudbury Operation Strains Battery Nickel Supply – by Mariana Durao and Yvonne Yue Li (Bloomberg News – June 29, 2021)

(Bloomberg) — A strike at Vale SA’s Sudbury operations in Canada is taxing a nickel market that’s key to powering electric vehicles.

Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries. Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative.

That shift is increasing competition for briquette, pushing up North American premiums, or extra charges consumers pay on top of nickel prices on the London Metal Exchange, as stockpiles of the metal dwindle. Inventories of briquette, the main form of nickel stored at LME warehouses, have fallen 9% since a peak in April and are now at the lowest in more than a year.

“Given the challenges at a number of Class 1 nickel operations over 2021 to date, availability of material for end customer purchases is more limited that might have been thought,” said Colin Hamilton, an analyst at BMO Capital Markets.

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