Affected by the popularity of electric vehicle power batteries, nickel prices rise by 70% in one year

Although there are forecasts that nickel metal will exceed demand, the price of nickel has risen by 70% since March 2020 due to the heat of batteries. Traders and analysts have warned that the 'hype' surrounding electric vehicles has fueled nickel. With the dramatic increase in prices, there is an urgent need to develop new sources of nickel supply in the next few years. On the London Metal Exchange, nickel prices have risen by about 70% since their lows in March 2020, to US$18,410 per ton, as investors generally believe that nickel prices will benefit from the increase in sales of electric vehicles and use high-nickel batteries There are more and more electric cars. Encouraged by policy makers to promote 'green' regulations, it is predicted that electric vehicles will grow substantially, and prices of a series of input circuit metals such as copper and lithium have also been raised in recent months. Figure: The increase in sales of electric vehicles such as Volkswagen ID.3 drives the demand for nickel. Wood Mackenzie analyst Andrew Mitchell said, “This is electric vehicle hype. If you look at 2020 The relationship between supply and demand will find that there is a substantial surplus, and we expect to have a surplus this year and next. 'Only 8% of the demand for refined nickel comes from batteries, and more than two-thirds come from the stainless steel industry. But according to the data of consulting company CRU, by 2040, the share of the battery may reach 32%. Such predictions have contributed to the rise of the stock market. 'The market sentiment has changed substantially.' said Rob Crayfourd, portfolio manager of resource expert NCIM. 'A lot of stimulus measures are focused on green energy, which is why the enthusiasm for this field is coming up. 'But given the scale of investment in new supplies, Crayfourd is also cautious about the future of nickel. He said that he prefers copper because it is more widely used in the wiring of a series of clean energy technologies, including wind turbines, and the shortage of copper supply is imminent. As far as nickel is concerned, new projects in Indonesia, Africa, Canada and the United States are expected to result in a continued nickel supply surplus. The largest source may come from Indonesian projects supported by China, which plan to use a process called high-pressure acid leaching to separate nickel and cobalt to meet the needs of the electric vehicle industry. One of the projects is led by China's Ningbo Liqin Mining Co., Ltd. (Lygend) and will be put into operation in 2021. The other is led by GEM, a Chinese battery material manufacturer, and plans to start production in 2022 according to the new crown pneumonia epidemic. China Guangfa Securities analysts said they expect these projects to reduce the cost of high-pressure acid leaching projects and bring about a revolution in nickel for batteries. High nickel batteries can store more energy, thereby providing longer electric vehicle driving range. Metals company TalonMetals and Spanish mining company Tinto are developing nickel mines in Minnesota specifically for the electric vehicle market, hoping to start production in 2025. In January, Kabanga Nickel, a small British miner, reached an agreement with the Tanzanian government to develop nickel mines in the country. The supply outlook is uncertain. In 2020, protesters in New Caledonia, a French territory in the South Pacific, attacked a mine owned by Vale in Brazil. Because the company agreed to sell the assets to the Swiss commodity trader Trafigura and its associates. In October 2020, although New Caledonia’s referendum turned out not to be independent from France, there is growing anger against foreign mining companies. Further turbulence may keep the Goro mine closed, making it difficult to reopen, and affect other mines on the island. 'If this situation continues, all expectations will fall.' A nickel trader said, 'This island is a gunpowder keg.' Morgan Stanley analyst Rachel Zhang said there may be a gap in nickel supply for electric vehicles. Large enough to affect nickel pricing within two to three years. NCIM's Clayford believes that the growth in demand is more long-term than the market suggests. He predicted that the surplus will continue until 2024, or even 2025.