CRU Group Principal Consultant Alex Laugharne believes the need for batteries will push nickel demand up — the question is when.
As investors and market watchers alike debate whether lithium-ion battery component nickel is in fact a base metal or a battery metal, CRU Group Principal Consultant Alex Laugharne brings some new perspectives, such as timing, to the table.
In a conversation with the Investing News Network at PDAC 2019, Laugharne explained that sentiment surrounding battery demand could become the primary driver of nickel demand — but that the real question is when that will be seen.
“Batteries only account for about 4 percent of nickel demand at the moment, and I think at CRU we see that growing to 9 percent by 2023. But then, when you look further ahead, we’ve got sort of exponential growth, not only in the number of electric vehicles that are expected to be produced, but also in the nickel intensity of individual batteries,” Laugharne said.
“[That growth] will push batteries [towards] accounting for as much as almost a quarter of the entire nickel market maybe towards 2030, so it depends how far ahead you look,” he said.
“For the short to medium term, though, it’s worth remembering that nickel is still 70 percent used in stainless steel, so the difference between stainless demand being up or down 1 or 2 percent is much more important for now than a 10 or 20 percent change in battery demand.”
With the electric vehicle revolution painting a positive picture for nickel’s future, Laugharne feels that demand for the commodity will remain strong going forward.
“On the demand side, we’re expecting more electric vehicles coming on the road; I think CRU’s on the more conservative end, and we still have nickel being a very important part of that story in the long term, and other people have much more bullish forecasts,” he said.
“I think most people think demand could triple, it could go up by much more than that, so it’s definitely hard to not see a pretty positive story on that side.”
Nickel was at US$13,605 per tonne on the London Metal Exchange as of last Wednesday (March 6).
Watch the interview above for more from Laugharne. You can also click here to view our full PDAC 2019 interview playlist on YouTube.
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Securities Disclosure: I, Olivia Da Silva, 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.