aoth-logoaoth-logoaoth-logoaoth-logo
  • Articles
    • Medical –
      • Addiction –
      • CBD –
      • Health –
      • Wellness –
    • Metals –
      • Battery Metals –
      • Critical Metals –
      • Energy Metals –
      • Industrial Metals –
      • Precious Metals –
    • Energy –
      • Nuclear –
      • Oil & Gas –
      • Renewable –
    • Environment –
      • Clean Energy –
      • Climate Change –
        • Decarbonization –
        • Electrification –
      • Pollution –
    • Markets –
      • Bitcoin –
      • Bonds –
      • Commodities –
      • cryptocurrency –
      • Currency –
      • Digital Currency –
      • Inflation –
      • Interest Rates –
    • Technology –
      • 3D Printing –
      • 5G –
      • Artificial Intelligence (AI) –
      • Blockchain –
      • Imaging –
    • Politics –
    • Education –
  • 文章
  • Company Profiles
  • News
  • Media
Home | Disclaimer | 免责声明 | Newsletter Subscribe | RSS Subscribe

Nickel Market Update

  • Home
  • Articles
  • Environment Climate Change Electrification
  • Nickel Market Update
February 15, 2022

2022.02.15

The nickel market is currently experiencing its biggest squeeze in recent memory.

Aggressive pledges to fight climate change have precipitated a buying spree of metals that are key to the clean energy transition. Nickel, a key ingredient in EV batteries, is undoubtedly near the top of every shopping list.

Inventories of the metal have been dwindling across the world, given the relentless demand from the EV sector, and it appears some are even willing to pay “whatever it takes” to snap up the battery mineral before others can.

This week, the cash three-month spread on nickel notched a new record. Contracts for immediate delivery traded at a premium of $570/t to those in three months, the highest such premium since the historic squeeze of 2007.

Similar happened in January, but for near-dated contracts. Cash contracts on the LME reached a $90/t premium on Jan. 18 to those expiring a day later, the highest since 2010 and nearing levels seen in 2007. This prompted the bourse to step up its monitoring measures, the third time it had to do so in 12 months.

The latest nickel squeeze, though, has much bigger implications, seeing the market is now pricing in tighter nickel supplies for longer periods amid strong demand from battery manufacturers.

For instance, the spread between February and March contracts has more than doubled in the past week; so has the spread between March and April contracts.

Since April 2021, LME stock has declined by nearly two-thirds, from approximately 261,000 tonnes to roughly 88,100 tonnes in January 2022.

All this reveals that the world may quickly run out of available nickel for clean energy applications, especially with the break-neck speed at which demand is moving.

A report by UBS indicates that a deficit in nickel will come into play as soon as this year. By the end of the decade, UBS forecasts a large deficit of 2.2 million tonnes for the battery metal.

A more conservative estimate from Rystad Energy shows that demand for high-grade nickel used in EV batteries will outstrip supply by 2024. By then, global demand will climb to 3.4Mt, compared to 2.5Mt this year, while supply will grow to 3.2Mt.

The gap will then widen quickly to a deficit of 0.56Mt by 2026, driven by surging demand from the battery sector.

Source: Rystad Energy

While EV battery is not the dominant end-user for nickel, that being stainless steel, EV’s share of nickel demand has been growing at a faster rate and is expected to trend up.

Wood Mackenzie analyst Andrew Mitchell estimates that of the 2.8 million tonnes demanded last year, 69% was used to make stainless steel and 11% to make batteries, up from 71% and 7% respectively in 2020. Mitchell expects batteries’ share of demand to rise to 13% in 2022.

According to Rystad’s latest report, nickel demand from the stainless steel industry is expected to grow at about 5% per year, while the market for batteries is poised to explode. “In an unconstrained supply scenario, batteries could require more than 1Mt of nickel metal by 2030, quadrupling from the current demand of 0.25Mt,” the energy research firm said.

An explosive demand has also propelled nickel prices to levels last seen over a decade ago. In late January, nickel reached $24,435/t, representing the highest since August 2011.

Source: Reuters

Analysts believe that high prices could become the norm for many years as long as the supply shortage problem remains unsolved.

Commodities such as nickel may stay high for decades, according to BlackRock’s Evy Hambro, as mining companies struggle to keep up with the demand created from the switch to a “greener world”.

In a Bloomberg interview, the firm’s global head of thematic and sector-based investing said: “What we’re likely to see is strong demand that will keep prices at very very good levels for the producers for many years into the future, and that could be decades.”

These views were shared by Goldman Sachs Group, which also pointed to a commodity supercycle that has the potential to last for at least a decade.

The bullish market forces that are swirling in preparation for what many are calling the next commodities supercycle are excellent news for companies on the hunt for raw minerals to feed the energy revolution.

Richard (Rick) Mills
aheadoftheherd.com
subscribe to my free newsletter

Legal Notice / Disclaimer

Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.

Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.

Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

AOTH/Richard Mills has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.

AOTH/Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness.

Expressions of opinion are those of AOTH/Richard Mills only and are subject to change without notice.

AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.

You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments.

Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.

AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks.  Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security.

Share

Related posts

January 26, 2023

Graphite One working with three EV manufacturers and two US Department of Energy labs – Richard Mills


Read more
January 25, 2023

Max publishes first assays from CESAR drilling; highlights include 3.4% copper and 48 g/t silver over 10.6m – Richard Mills


Read more

French President Emmanuel Macron called for an EU package amounting to 2% of its economic output to rival the $370 billion US plan.

January 25, 2023

EU metals industry urges aid to rival US green energy package


Read more
January 24, 2023

Violent demonstrations roil Peru’s southern copper and tourism heartland


Read more
January 24, 2023

Copper shortage getting real – Richard Mills


Read more
December 9, 2022

Why the upcoming copper supply deficit can’t be easily fixed – Richard Mills


Read more
December 2, 2022

Artisanal miners thwarting copper supply uptake – Richard Mills


Read more
November 25, 2022

G1, graphite and anodes: all overlooked pieces of the EV battery supply chain – Richard Mills


Read more
November 22, 2022

Tight lead-zinc market keeping a floor under prices – Richard Mills


Read more
November 20, 2022

Maiden drill program update: Max pulls up visibly mineralized core from URU-C, the first drill target at CESAR copper-silver project – Richard Mills


Read more
November 9, 2022

Silver joining copper in upcoming supply crunch – Richard Mills


Read more
November 8, 2022

China’s near-complete dominance of ‘green economy’ metals – Richard Mills


Read more
November 1, 2022

The world needs more graphite, and the US needs Graphite One: Under the Spotlight with G1’s CEO Anthony Huston: Richard Mills


Read more
November 1, 2022

US battery and EV plants galore – Richard Mills


Read more
October 29, 2022

Moribund silver may soon have liftoff – Richard Mills


Read more
October 27, 2022

Copper: the most important metal we’re running short of – Richard Mills


Read more
October 4, 2022

Goldshore hits bigly copper


Read more
October 4, 2022

The case for low-grade sulfide nickel deposits


Read more
October 3, 2022

Max to drill URU in October; geophysical survey results correlate with surface geochemical anomalies


Read more
September 28, 2022

Strong hands buy at bottoms and sell at tops – Richard Mills


Read more
copper silver
September 8, 2022

Copper fundamentals strong despite price weakness


Read more
August 24, 2022

Two charts show copper price drop may have been overdone


Read more
August 14, 2022

Max Resources identifies two very significant initial drill targets at CESAR’s URU District


Read more
August 10, 2022

Core Asset drills 48.5m of 1.03% CuEq within 95m of 0.54% CuEq from surface at the Laverdiere skarn-porphyry project, and intersects 1.5m of 4.49 g/t Au in the Lewellyn Fault Zone


Read more
July 20, 2022

Copper mines becoming more capital-intensive and costly to run


Read more
July 11, 2022

Core Assets finishes drilling at Laverdiere Skarn-Porphyry Project; moves on to Silver Lime


Read more
July 8, 2022

Norden Crown kicks off 3-5,000m drill program at Burfjord, Norway


Read more
RSS Subscribe
Subscribe to our RSS feed to receive our most recent articles directly to your favourite RSS Reader application.

Article Archives

Article Categories

  • Education (120)
  • Energy (91)
    • Nuclear (15)
    • Oil & Gas (11)
    • Re-newable (44)
  • Environment (321)
    • Clean Energy (55)
    • Climate Change (211)
      • Decarbonization (55)
      • Electrification (129)
    • Pollution (69)
  • Markets (252)
    • Bitcoin (1)
    • Bonds (13)
    • Commodities (114)
    • cryptocurrency (8)
    • Currency (66)
    • Digital Currency (5)
    • Inflation (64)
    • Interest Rates (38)
  • Medical (90)
    • Addiction (8)
    • CBD (4)
    • Health (89)
    • Wellness (26)
  • Metals (670)
    • Battery Metals (193)
    • Critical Metals (117)
    • Energy Metals (44)
    • Industrial Metals (204)
    • Precious Metals (352)
  • Politics (183)
  • Technology (45)
    • 3D Printing (3)
    • 5G (26)
    • Artificial Intelligence (AI) (9)
    • Blockchain (6)
    • Imaging (3)
  • Uncategorized (355)

AOTH Portfolio

  • Articles
  • 文章
  • Company Profiles
  • Company News Releases
  • Media
  • AOTHs-six-for-22
  • Disclaimer

Recent Articles

  • Renforth taking a closer look at lithium- and rare-earths bearing pegmatites – Richard Mills January 27, 2023
  • Clean energy sets $1.1 trillion record that’s bound to be broken January 27, 2023
  • How Not to Fight Inflation January 27, 2023
  • Graphite One working with three EV manufacturers and two US Department of Energy labs – Richard Mills January 26, 2023
  • Earth’s core appears to have reversed its spin. So what does this mean? January 26, 2023
  • A “Debt Doom Loop” Is Now Fully Engaged January 26, 2023
  • Max publishes first assays from CESAR drilling; highlights include 3.4% copper and 48 g/t silver over 10.6m – Richard Mills January 25, 2023
  • EU metals industry urges aid to rival US green energy package January 25, 2023

Ahead of the Herd

Enjoy hundreds of top-notch, thoroughly-researched articles on commodities and the junior resource companies that search for deposits of them.

Newsletter Subscribe

Subscribe to our free newsletter so we can start telling you things everyone else doesn't already know!

Recent Articles

  • Renforth taking a closer look at lithium- and rare-earths bearing pegmatites – Richard Mills
  • Clean energy sets $1.1 trillion record that’s bound to be broken
  • How Not to Fight Inflation

Explore

  • Articles
  • 文章
  • Company Profiles
  • Company News Releases
  • Media
  • AOTHs-six-for-22
  • Disclaimer
© 2020 Ahead of the Herd. All Rights Reserved