Nickel demand is still driven mainly by the stainless steel sector, but our most popular nickel news stories focus on the battery narrative.
Analysts have stressed the importance of nickel to the electric vehicle (EV) market, which should push nickel demand way up in the coming years just as global supply is set to decrease when top nickel producer Indonesia stops exporting its ore.
For that reason, most nickel news stories coming out of 2019 had to do with the future of nickel in the face of speculated demand. Read on for a look at our most popular nickel news articles of 2019.
During the 2019 Prospectors & Developers Association of Canada convention, Anthony Milewski of Cobalt 27 Capital, now Conic Metals (TSX:NKL), discussed his thoughts on nickel, stating that it will be essential for the electric car boom taking place right now.
“The new demand for nickel, which will be tremendous, will come from batteries,” he said. As batteries move towards a cathode chemistry with eight parts nickel, one part cobalt and one part manganese, “tremendous pressure will be put in the Class 1 nickel market.”
At this year’s Cathodes conference, the Investing News Network (INN) sat down with Jim Lennon, senior consultant at Macquarie, to discuss the future of nickel.
Lennon stressed that, in addition to the hullabaloo regarding Indonesia’s nickel ore export ban, the metal has also struggled with supply concerns.
“(Aside from that), there’s been a massive drawdown of (London Metal Exchange) nickel inventories,” he said. “They were at around 170,000 tonnes in September, now down to around 60,000 tonnes.”
He also discussed nickel’s challenges with the battery industry, pointing out that “virtually all nickel supply growth in the past years has come from nickel pig iron … which is not suitable for the batteries — so the challenge is to compete for the available nickel units.”
In September, INN talked to a series of analysts about nickel’s future following the announcement of Indonesia’s nickel ore export ban, which was confirmed that month after a long period of speculation that caused the base metal’s price to surge over the summer.
According to Wood Mackenzie’s report following the ban, “From 2020, the export ban is expected to result in a loss of 16,000 tonnes, 190,000 tonnes in 2021, 112,000 tonnes in 2022 and 85,000 tonnes per year from 2024 onwards. We do not believe that the total forecast loss in production in 2021 can be offset by a production increase in Indonesia.”
In February, Simon Moores, managing director at Benchmark Mineral Intelligence, spoke before the US Senate Committee on Energy and Natural Resources, where he stated, “We are in the midst of a global battery arms race in which the US is presently a bystander.”
Moores stressed the importance of nickel, stating that it will be one of the key metals to watch for in the coming years.
“As lithium-ion battery manufacturers reduce the amount of cobalt used in battery cells, nickel consumption rises and it does so in a major way,” said Moores.
In early September, the Indonesian government confirmed what many had speculated all throughout the summer: that the government would indeed ban nickel ore exports in 2020, dramatically decreasing global supply. The move was meant to encourage processing industries to develop in the country.
“The government decided — after weighing all the pros and cons — that we want to expedite smelter building,” said Bambang Gatot Ariyono, director general for minerals and coal at the Energy and Mineral Resources Ministry. “So we took the initiative to stop exports of nickel ores of all quality.”
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Securities Disclosure: I, Sasha Dhesi, 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.