That was the call from electric vehicle (EV) sector experts at a recent conference, who forecast a nickel shortage in the coming years for EV producers.
According to MetalBulletin, EV experts told the Fastmarkets 7th International Nickel Conference last week that the risk of not investing in nickel production was greater than doing so for EV producers.
Battery production must increase to meet this demand and panelists indicated that nickel is the EV battery metal of choice. They forecast this will likely remain the case for the next five to seven years at least, leading to an increase in nickel demand, along with the price.
“I am very bullish [on the price of nickel],” Thomas Hohne-Sparborth from consultancy Roskill said.
“Over the medium term, three to five years, you can get enough nickel units out of some active plants in Indonesia. Tsingshan [Holding’s Indonesian smelter on the island of Sulawesi] can come on-stream very quickly [and] $12,500-13,000 per tonne [for nickel] would be a good price incentive for such projects.”
But beyond the next three to five years, nickel will start to be impacted by demand from the EV sector.
“Some of the higher-cost producers might need a slightly higher incentive price. We estimate $17,000 per tonne,” Hohne-Sparborth said.
For context, the LME’s three-month nickel contract settled at $11,800 on June 5.
“In the longer term, from 2025 onwards, with all the projects that we are currently aware of, the gap in the market [caused by demand outstripping supply] could only be filled with an incentive price in the $20,000-per-tonne range.
“We think, long term, the price of nickel will be in the mid $20,000 [per tonne] range,” he added.
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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