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Electric vehicles could fracture the nickel market - Andy Home

Metal News - Published on Tue, 13 Mar 2018

Image Source: Reuters
Reuters reported that China’s Ministry of Finance made some minor but significant tweaks to its nickel import tariffs at the start of this year. The import duty on melting-grade nickel cathode was doubled from 1 % to 2 %, while that on nickel sulfate was cut from 5.5 % to 2 %. The reason is that nickel sulfate is a form of the metal highly suited to the production of precursor battery materials.

China, already a leader in the electric vehicle battery sector, is evidently laying the ground for stimulating imports of nickel in the most readily usable composition for lithium-ion battery processing.

Batteries are still a relatively small part of nickel’s usage profile, representing about 4 % of global demand, according to the International Nickel Study Group.

But everyone knows that ratio is only going to increase as the electric vehicle revolution builds momentum.

As it does, however, it could fragment an already cracked market, both in terms of the supply chain and pricing.

Most of the world’s nickel production about 70% of it is used as an alloying input in the production of stainless steel.

The type of nickel used for stainless production was historically, in ascending order of price, stainless steel scrap, ferronickel and refined metal.

But the Chinese initiated a materials revolution around the middle of the past decade in response to nickel’s extraordinary bull run to more than USD 50,000 a tonne in 2007.

Looking for cheaper alternatives, they unearthed a technology that had been explored but never developed, namely nickel pig iron.

An explosion in this form of the metal has generated far-reaching consequences, including a whole new nickel ore supply stream from Indonesia and the Philippines, the offshoring of NPI production and even stainless steel production to Indonesia and the crash in the nickel price to less than USD 10,000 in 2016.

Producers of more conventional types of nickel are still struggling to adjust. Witness the decision late last year by Vale, the world’s largest producer, to mothball production capacity.

Nickel’s existing dynamics, beholden as they are to the needs of stainless steel producers, are highly problematic for the EV sector.

Most of the world’s current production growth is taking place in the NPI segment of the market.

NPI production is forecast to hit 700,000 tonnes this year, compared with global refined output of 2.08 million tonnes in 2017, according to Wood Mackenzie.

Global mine output, the research house says, will increase by more than 10% this year but just about all of that will come from Indonesia and the Philippines in the form of nickel ore destined for NPI processing.

The problem is that none of this material is suited for production of the nickel sulfate powder desired by battery makers.

It’s not impossible to transform NPI into sulfate, but it’s neither economical nor logical. As a result, to quote Wood Mackenzie, “about half of global nickel production is not available” for battery usage.

Source :

Posted By : Rabi Wangkhem on Tue, 13 Mar 2018
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