An essential metal
The nickel industry is a +US$20 billion per annum industry worldwide. Whilst stainless steel production currently dominates the demand for nickel, the high growth industry of battery technology for the electric vehicle market is forecast to grow significantly in the coming years and is set to transform the nickel industry for decades to come.
Nickel has numerous physical and chemical properties that make it a key component for a wide range of products including stainless steel, medical equipment, mobile phones, wind turbines and batteries. It is an excellent resister of corrosion even at high temperatures and is used to plate other metals to protect them. It is also a hard, malleable, and ductile metal, and is a good conductor of heat and electricity.
The use of nickel is dominated by the production of ferronickel for stainless steel, currently accounting for 68% of the market. Other uses for nickel production include alloying elements, coatings, batteries, and other uses such as kitchen wares, mobile phones, medical equipment, transport, buildings, power generation and jewellery.
NICKEL SUPPLY AND DEMAND
Global demand for nickel is seen increasing by 9.2% in 2021 to 2.58 million tonnes, while supply is expected to climb by 5.8% to 2.638 million tonnes. (reuters, Jan 2021). Any shortfall in nickel production will bump headlong into surging demand for stainless steel in China and increasingly in other countries as economic stimulus accelerates worldwide stainless steel demand. Adding to the increase in stainless steel demand is the advent of EVs as a mode of transport preferred by governments as they seek to reduce pollution from internal combustion engines in major cities.
Nickel has been the subject of repeated booms (and busts) over previous decades, mainly because of supply shortages caused by labor disputes in big Canadian mines. The predicted nickel boom this time around has a new price driver, EVs, a mode of transport which was not even a blip on commodity investors radar screens in the early 2000’s.
The world’s nickel resources are currently estimated at almost 300 million tonnes. More than 50% of the global nickel resources occur in Australia, Indonesia, South Africa, Russia and Canada. Over two million tonnes of new or primary nickel are produced and used annually in the world, mined in more than 25 countries worldwide.
THE BATTERY MARKET
As the world looks towards building a sustainable future with the development and production of green energy solutions, such as electric vehicles and new battery storage technologies, nickel is set to benefit. This clean energy transition and specifically the products needed for it like batteries all require mineral intensive components and nickel is, by mass, the most important metal in the production of new technology battery cathodes.