The Japanese metallurgical group is optimistic about nickel for electric batteries. the market is growing strongly. A financier of the mining sector, the Australian Macquarie, is more cautious: the rise in demand will not necessarily be that of prices.
Global demand for nickel used in batteries is expected to increase 18% this year from 2020, supported by strong sales of electric vehicles (EVs) in China, Sumitomo Metal Mining (SMM), Japan’s largest producer, said on Tuesday. nickel. It is owned by a huge conglomerate present in all sectors of the Japanese economy.
Sumitomo Metal, which supplies cathode materials for Panasonic’s lithium-ion batteries used in U.S. Tesla’s electric vehicles, said demand for nickel used in rechargeable batteries would rise to 228,000 tonnes in 2021 from 193,000 tonnes in 2020. Sumitomo can source battery grade nickel in Australia, from Glencore and in New Caledonia from Tafigura.
Nickel is used up to 70% in the manufacture of stainless steel, but is also an essential ingredient for lithium-ion batteries used to power electric vehicles, and the demand is expected to accelerate in the years to come.
“Sales of electric vehicles are increasing very rapidly, especially in China, despite the COVID-19 pandemic”Yusuke Niwa, managing director of the raw materials department including nickel, of Sumitomo Metal, told Reuters reporters.
“The recent drop in LME nickel inventories reflects growing demand for the metal used in batteries,” he continued, pointing to a drop of more than 30,000 tonnes over the past two months.
Production of class 1 nickel (99.98% metal) intended for battery cathodes in a factory (Nornickel).
Sumitomo Company (SMM) also predicted that the global nickel market surplus will shrink to 58,000 tonnes this year from 132,000 tonnes in 2020 as strong demand from the stainless steel sector will offset higher production. of nickel pig iron (NPI) in Indonesia.
However, these forecasts are weighted by Australian bank Macquarie in its latest survey of the nickel market. According to this actor very present in mining investments and at the LME in London, “Indonesian supply is steadily increasing with huge additions in all nickel products, which will meet rising demand”.
Global nickel demand is forecast to increase 9.2% in 2021 to 2.58 million tonnes, while supply is expected to increase 5.8% to 2.638 million tonnes.
In the first four months of the year, the global nickel market recorded a deficit of 34,900 tonnes, the International Nickel Study Group said.
“We expect a surplus later this year as other Nickel Iron (NPI) production projects in Indonesia begin.”, admitted the head of Sumitomo. A hydro-metallurgical plant, financed by a Chinese group and having more than twice the production capacity of the Usine du Sud in New Caledonia, should come into production in 2023, said trader Marex Spectron.
Japanese nickel demand is expected to increase 15.7% to 167,400 tonnes, while supply is expected to fall 2.4% to 165,800 tonnes.
Kawasaki industrial zone in Japan
The Japanese group Sumitomo owned up to 14% of the South plant in New Caledonia, before withdrawing in 2016. It is associated with the Swiss trader Trafigura (current shareholder of the Caledonian plant) for development global hydrogen fuels.
Evolution of nickel prices at the London LME, updated to 06/29/2021
LME-Nickel on 06/29/2021 at 19:10 GMT: 18,382 dollars / tonne + 0.56%