EV growth to boost nickel consumption: Norilsk

Rapid growth in electric vehicle (EV) production and an increasing market share of high-nickel-content battery cathode materials will boost nickel demand in the long term, according to Russian producer Norilsk Nickel's regional analyst Dmitry Zamula.

Nickel consumption in the power battery sector will increase to 370,000 t/yr in 2025, up sharply from around 34,000t in 2017, Zamula told delegates at the China nickel and cobalt annual conference in Xiamen, Fujian province.

Nickel demand from power battery manufacturers is growing fast, although it remains small among all applications for nickel.

Asia, in particular China, has become the biggest market for EVs, including plug-in hybrid and pure electric. China sold 721,000 and produced 735,000 EVs during January-September this year, up by 81.1pc and 73pc year on year respectively. The country is on target to produce 1mn EVs this year.

The Chinese government has tightened its regulations on EV subsidies, which are scheduled to be completely removed by the end of 2020. Beijing in February cancelled or cut subsidies for EVs with ranges below 300km and increased the subsidy for more expensive longer-range vehicles.

China's production of lithium iron phosphate cathode materials fell by 12pc year on year during January-September, while production of nickel-cobalt-manganese cathode materials, which use more nickel, increased by 41pc year on year in the same comparison.

More nickel briquette will be used to produce nickel sulphate and then used in lithium-ion batteries. Feedstock producers, including nickel sulphate and ore, are planning to develop production of downstream products.

Nickel briquette stocks held by the London Metal Exchange will continue to meet demand in a few years until the supply deficit for nickel sulphate exacerbates in 2020, Zamula said.

Chinese prices for nickel sulphate were assessed lower yesterday at 24,500-27,000 yuan/t ($3,530-3,890/t) from the previous assessment of Yn25,000-27,500/t on lower than expected demand from the power battery sector in the fourth quarter. Prices for 99.9pc grade metal were assessed higher at Yn98,500-107,000/t yesterday from Yn98,500-106,500/t.