Global nickel supply deficit to widen in 2018

The global nickel supply deficit is expected to increase in 2018, reflecting rising demand from the battery industry, according to Xu Aidong, chief analyst at China Nonferrous Metals Industry Association.

Global demand for nickel is estimated at 2.3mn t this year, compared with 2.17mn t of supply, indicating a deficit of 130,000t, Xu told delegates at the 2018 New Energy Materials Summit in Wuxi.

The global nickel market was in a 80,000t deficit last year.

Around 81,000t of nickel was consumed by battery manufacturers in 2017 — 95pc primary metal and 5pc scrap.

Consumption in the battery sector is expected to reach 241,000t in 2021, with 91pc made up of primary metal.

Nickel prices are expected to average $13,000/t this year, up from $10,475/t in 2017 and $9,640/t in 2016.

In China, nickel consumption in the new energy vehicle sector was around 10,000t in 2017, and is expected to rise to 38,000t in 2020 and 137,000t by 2025.

Nickel sulphate is the biggest contributor to growing Chinese demand for nickel, with domestic production rising by 60pc to 326,000t in 2017.

China currently has 440,000 t/yr of nickel sulphate capacity.

Spot nickel sulphate prices were assessed at Yn26,000-28,000/t on 8 May, up by 5pc from Yn25,000-26,500/t in mid-November last year.

Rising demand and higher prices have encouraged many companies to invest in production of nickel sulphate.

BHP's Nickel West subsidiary in Western Australia will start producing nickel sulphate at its Kwinana refinery in April next year at a rate of 100,000 t/yr and is considering doubling this to 200,000 t/yr.