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Strong battery demand for nickel in 2017

07 Mar 2018 14:33 GMT
Strong battery demand for nickel in 2017

London, 7 March (Argus) — Nickel demand from the battery sector saw strong growth in 2017, Russian diversified metals producer Nornickel said.

The company said that nickel demand from the battery sector expanded by 29pc to exceed 100,000t last year because of a 40pc rise in global electric vehicle (EV) production.

But this was a small fraction of global nickel demand, accounting for just under 5pc of total demand last year, Nornickel said.

The battery sector is still a relatively marginal driver of global nickel demand. And Nornickel expects it to become a consumer of nickel from 2020, but this is subject to EV penetration growth in the global car market.

It anticipates that uptake from the battery sector could exceed 500,000t by 2025 as a result of the emerging shift to more nickel-intensive technologies such as lithium-nickel-manganese-cobalt and lithium-nickel-cobalt-aluminium oxide battery cathode materials.

Nornickel expects the nickel market deficit to fall to 15,000t this year from 105,000t in 2017, because of a ramp-up of nickel pig iron production in Indonesia and the recovery of ore exports from Indonesia and the Philippines.

Indonesia announced in January last year it would partially ease its ban on exports of low-grade nickel ore that it implemented in 2014. This saw exports from the country increase.

Indonesia's exports of nickel ore and concentrate to China increased to 3.8mn t of nickel ore and concentrate from 104,405t in 2016. But the Philippines remained the largest supplier of nickel ore and concentrate to China, shipping 29.11mn t in 2017, 5pc lower than the 30.6mn t a year earlier.

China's nickel ore and concentrate imports increased almost two-fold in January, up by 92pc to 2.09mn t, compared with 1.09mn t in January 2017.

Indonesia was the largest nickel ore and concentrate exporter to China in January, with exports up by 785pc to 1.09mn t in January from 123,321t t a year earlier.

Nornickel's nickel output fell by 7.9pc to 217,112t last year from 235,749t in 2016, but production from the company's own feed was 210,131t and within its output guidance of 206,000-211,000t.

The fall in nickel production last year was primarily driven by the reduction of low-margin processing of third-party feed at its Harjavalta refinery in Finland because of downstream reconfiguration.

The company is aiming to produce 210,000t-215,000t of nickel this year.