Nickel demand is still driven mainly by the stainless steel sector, but our most popular nickel news stories focus on the battery narrative.
Like other base metals, nickel faced challenges in 2018. While prices rose in the first half of the year, the trade war between the US and China ultimately kicked in and led to a drop.
Although the steel sector remains the dominant source of nickel demand, much attention was focused on the battery sector in 2018. As electric vehicle uptake continues, many investors and market watchers are optimistic that nickel demand from the industry will increase.
As a result, many of our top nickel news stories of the year focus on nickel’s role in batteries and how changing supply/demand dynamics may affect prices moving forward. Read on for a look at our most popular nickel news articles of 2018.
Our top nickel news story of 2018 is a June interview with Jon Hykawy, president of Stormcrow Capital. Speaking at the 6th International Nickel Conference, Hykawy shared his thoughts on the future of the battery metals sector, including the role nickel will play in lithium-ion batteries moving forward.
“It looks like [battery companies] going to be able to push higher and higher nickel levels moving into the future,” he said. “Maybe it’s a slightly higher processing cost, but we’ll see how it plays through. Nickel is going to be a part of these batteries for a very long time to come.”
In its metals outlook for Q2, released in May, Scotiabank commented on nickel supply/demand dynamics, suggesting that while demand has started to outstrip supply, the market will require multi-year deficits to draw down the significant glut of excess metal that has built up in warehouses.
At the time, the base metal was trading at US$6.26 per pound, and Scotiabank was predicting it would move higher in 2019 and beyond. Ultimately the trade war between the US and China meant that did not happen, but on the whole experts believe nickel prices will be stable or rise higher next year.
RNC Minerals (TSX:RNX) made headlines at the beginning of 2018 with the announcement that it plans to build the world’s biggest nickel-cobalt project in 2019. The company said at the time it was in talks with commodities traders, mine operators and financers to raise $1 billion for the construction of its Dumont mine in Quebec.
Work at Dumont has continued throughout the year, with a feasibility study expected in the first half of 2019. RNC was also in the news midway through the year for a “once-in-a-lifetime” discovery at its Beta Hunt gold mine in Australia. Listen to President and CEO Mark Selby weigh in here.
Major miner Glencore (LSE:GLEN) revealed in April that it will spend nearly $1 billion to hunt deep underground for more ore in Sudbury. The company said it would go over 2 kilometers below surface at its Onaping Depth project, located beneath its Craig mine. Onaping Depth is expected to begin production by 2023, ramping up to full speed by 2025.
According to Peter Xavier, the company’s vice president of Sudbury operations, Glencore has done extensive planning to ensure safe and economic excavation. “I think deep will be the new norm and certainly in Sudbury, that’s where the future lies,” he said at the time.
The final nickel news story on our list is another from the 6th International Nickel Conference. This one covers a presentation from Ken Hoffman, client development executive at McKinsey & Company. In his talk, Hoffman said he expects nickel supply and demand to grow at an accelerated pace through 2021, driven by electric vehicle demand.
He believes that as long as nickel prices remain relatively flat there is little danger that the metal will be priced out of the battery equation, like some believe could happen to cobalt. However, he also spent time discussing next-generation batteries that feature neither of those metals.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.