AGORACOM Small-cap Investor Relations Blog

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Nickel in batteries to take ‘significant’ market share from 2023

• “We see total nickel demand from the battery market (all end-uses) much higher than that with the ongoing trend towards higher nickel cathode technology in EVs,” Miller said.

By: Angela East

The rapidly growing demand for more nickel in electric vehicle (EV) batteries is expected to see the base metal take a much bigger market share in just three years.

“In terms of when the shift towards nickel intense cathodes starts to take effect, we expect batteries using high nickel cathodes (namely NCM 811) start to really develop significant market share from 2023 onwards,” Benchmark Mineral Intelligence analyst Gregory Miller told Stockhead.

NCM 811 has a chemistry make-up of 80 per cent nickel, 10 per cent cobalt and 10 per cent manganese.

For some time now, car and battery makers have been working to reduce the amount of cobalt that goes into their batteries because it is one of the most expensive parts and there is a shortage of the commodity.

“Some of this technology is just starting to filter into the industry now following many years of development yet it still faces technical challenges in being able to deploy into the EV market,” Miller explained.

“By increasing nickel in the cathode, you decrease the life of the battery (i.e. how many cycles you can put it through) and increase safety issues linked to thermal stability.

“This transition will be significant for the industry as demand grows, by 2035 demand could be roughly as big as the industry was in 2019.”

Major players like South Korean battery materials maker Posco are now producing cathodes with greater nickel content to meet demand for greater energy density and longer driving range in the next generation of EVs.

A recently completed 25,000-tonne-per-year plant expansion will mass produce cathodes with 65 per cent nickel content, Posco says.

Fellow South Korean battery maker Samsung says that nickel will make up more than 80 per cent of the cathode materials in its fifth-generation EV batteries when commercial production begins in early 2021.

While Wood Mackenzie is predicting demand for nickel sulphate from the EV market to reach around 800,000 tonnes a year by 2035, Benchmark Minerals Intelligence is expecting it to far exceed that.

“We see total nickel demand from the battery market (all end-uses) much higher than that with the ongoing trend towards higher nickel cathode technology in EVs,” Miller said.

“In Benchmark Minerals most recent quarterly nickel forecast we see nickel demand from lithium-ion batteries reaching 2,250,000 tonnes by 2035.”

Market could open up for multiple nickel products

Miller says it has been suggested that the rise of EV demand could result in a “bifurcation” of the nickel market, with a split between higher-grade nickel for the EV industry and lower-grade (mainly ferronickel and nickel pig iron) nickel to supply stainless steel mills.

But this all depends on the success of high-pressure acid leach (HPAL) operations being built in South East Asia.

“The history of HPAL operations is littered with technical and operational challenges, and if these projects fail to bring sufficient nickel units to market, a wider spectrum of nickel feedstocks may become economically viable in the production of nickel sulphate due to a higher price environment,” Miller explained.

However, the nickel sulphate market is expected to remain in oversupply for a few years yet.

“Benchmark Minerals forecasts the nickel sulphate market to remain in surplus until 2024, where we expect a deficit to emerge thereafter where rapid demand growth will set in as EV penetration rates rise quickly,” Miller said.

“This is likely to be exacerbated by increasing use of high nickel cathodes (NCM 811).”

Spurring a price rise

Although the nickel price is on an upward trend, it is still off the five-and-a-half-year high of $US18,620 ($27,097) per tonne it reached in September last year.

It currently sits at $US12,930 per tonne, only about 17 per cent higher than its recent bottom in March.

However, longer term Benchmark sees prices rising to between $US15,000 and $US20,000 per tonne as supply struggles to match the significant ramp up in demand from EV’s over the coming decade.

“Indeed, with the next generation of supply suitable for use in batteries set to come from capital intensive HPAL projects in South East Asia, a higher pricing environment will be necessary to incentivise both the development and operation of these projects.”

Source: https://stockhead.com.au/resources/nickel-in-batteries-to-take-significant-market-share-from-2023/

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

• Nickel will continue to outperform the base metals complex over the coming months, said Fitch Solutions in a report released last week.
• “Speculative buying driven by nickel’s bright EV demand outlook has been the key driver of the metal’s positive price performance in recent months, while the breaching of a key resistance level this week suggests prices have further room to run over H219,” writes the reports authors.

(Kitco News) – Nickel will continue to outperform the base metals complex over the coming months, said Fitch Solutions in a report released last week.

“Speculative buying driven by nickel’s bright EV demand outlook has been the key driver of the metal’s positive price performance in recent months, while the breaching of a key resistance level this week suggests prices have further room to run over H219,” writes the reports authors.

Fitch noted that nickel prices have rallied over 20% year-to-date, while its base metals peers have all lost in value, placing the former as the only base metal in positive territory so far this year.

“As we pass the mid-point of the year, below we analyse why nickel prices have been significantly outperforming other base metals, despite a number of challenges in terms of fundamentals and on the macroeconomic front.”

Fitch says the price run up is due to antcipated electric vehicle adoption.

“We believe the main driver of the nickel price rally has been the sustained level of speculative buying – with non-commercial long positions on the rise so far this year – due to the metal’s ongoing allure as key demand-beneficiary among metals used in the growing EV battery market. While electric vehicle batteries still only account for less than 5% of total refined nickel demand, this figure is set to grow considerably over the coming years and investors are already placing bullish bets in anticipation.”

Fitch estimates that nickel will be in a deficit of 23kt this year, down from 51kt last year.

The authors caution that the larger macroeconomic environment could hamper a break out.

“The global macroeconomic environment has also worsened so far this year, which has led to negative sentiment for base metals generally. This deterioration is primarily down to the escalation of the US-China trade dispute and slowing growth in China, where manufacturing PMI’s have dropped below the all-important 50 mark in recent months. Were the conflict to escalate further in the coming months, nickel prices could be dragged lower in line with other base metals.”

Source: https://www.kitco.com/news/2020-06-15/Nickel-set-to-pierce-shaky-macroeconomic-outlook.html

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Nickel prices jump after Vale trims output target

• Vale cuts 2020 output for nickel, copper
• “Vale’s cut to production has supported the market but mines closing production is not too new as we knew some mines would shut,” said Commerzbank analyst Daniel Briesemann.

By Zandi Shabalala

LONDON, April 20 (Reuters) – Nickel prices jumped to their highest in more than a month on Monday after mining company Vale slashed its annual output target for the stainless steel ingredient due to the impact of the coronavirus pandemic.

Benchmark nickel on the London Metal Exchange (LME) was 4% higher at $12,520 per tonne at 1600 GMT, after earlier jumping to its highest since March 13 at $12,535.

“Vale’s cut to production has supported the market but mines closing production is not too new as we knew some mines would shut,” said Commerzbank analyst Daniel Briesemann.

“The negative impact of the virus is more severe for the demand side and the market could be well oversupplied this year.”

Vale, one of the world’s top producers of nickel, cut its 2020 production forecast for the metal to 180,000-195,000 tonnes from 200,000-210,000, excluding its unit in New Caledonia, because of the impact of the novel coronavirus outbreak.

Japan’s Sumitomo Corporation has also shut down output at a nickel mine in Madagascar while major nickel producer the Philippines closed some of its mines to curb transmission of the virus.

CHINESE DEMAND: Demand for nickel picked up slightly in March as China reopened its economy. Stainless steel futures surged as much as 4.4% on Monday.

2020 BALANCE: Despite the mounting supply cuts, a Reuters poll showed that the nickel market is expected to be in surplus of 89,000 tonnes this year.

CHINA ECONOMY: China, the world’s top metals consumer, cut its interest rate for a second time after its economy contracted for the first time in decades. The move – which was widely expected – is aimed at cushioning the world’s second largest economy against the impact of the coronavirus.

COPPER SMELTING: Global copper smelting slid in March, driven by shutdowns in China but started to recover at the end of the month, according to an index based on satellite surveillance of copper plants.

ALUMINIUM INVENTORIES: Aluminium stocks in LME-registered warehouses soared 46,275 tonnes, helping to lift inventories available to the market to 1.18 million tonnes which is the highest since Dec. 20. MALSTX-TOTAL

SPREAD: The discount of LME cash aluminium to the three-month contract CMCU0-3 was at $37.75 a tonne, reflecting expectations for oversupply.

Read More: https://www.reuters.com/article/global-metals/metals-nickel-prices-jump-after-vale-trims-output-target-idUSL4N2C82C3