A Tale of Two Metals, Copper & Nickel, Will Determine the Future of Energy

By David Fickling – Bloomberg

Annual nickel supplies need to grow from about 3.4 million tons currently to more than 5 million tons in 2030 to keep the world on a path to net zero, according to the International Energy Agency. Copper must go from 25 million tons to 35 million tons. Ideally, we should be seeing supply of both metals expanding at a rapid clip, with the emphasis most strongly on copper, where miners produce about 10 metric tons for every ton of nickel.

The scenario that’s playing out is close to the opposite. Chinese companies refining battery-grade nickel from the red soil of eastern Indonesia are flooding the market, sending prices down about 40% over the past 12 months and pushing about half of global production into losses. While copper prices have fallen about 7.7% over the same period, almost every mine is churning out profits. That’s still not sufficient to induce more production to come onstream, however. Fitch Ratings Inc. estimates that supply will be falling 1.2 million tons short of demand by 2029.