Nickel is adding shine to the otherwise lacklustre 2019 industrial metals complex, as expectations of booming demand from electric vehicles and renewed supply worries rev prices to a one-year high.

Nickel is now up 37% since the start of the year, reaching $14,665 per tonne on Thursday in London and jumping 4% in Shanghai to the equivalent of $16,690.

Open interest in Chinese nickel futures is up by half in a fortnight and trading volumes have surged – indicating that the price spike is likely the result of speculation more than fundamentals.

Miners of the devil’s copper are used to wild swings in price. From the lows mid-2017 below $9,000 a tonne to around this time last year, the metal gained 79%, only to slump by nearly a third to its opening levels of 2019. And who can forget that in March 2007, nickel peaked at $51,780 per tonne.

The right chemistry

The electric vehicle (EV) narrative is an exciting one for the metal, but it is still early days. Very early days. Last year, only around 6% of nickel ended up in EV batteries. 70% of supply goes into making stainless steel.

That said the outlook is certainly rosy. Battery metals tracker Adamas Intelligence says electric vehicle manufacturers deployed 57% more nickel in passenger EV batteries in May this year, compared to 2018.

The deployment of nickel also outpaced the growth of the EV market overall. In May this year, total passenger EV battery capacity deployed globally was 48% higher year-on-year, according to Adamas data.

Nickel’s inroads is mainly due to shifting chemistries of nickel-cobalt-manganese (NCM) battery cathodes. First generation NCM111 batteries had a chemical composition of 1 part nickel, 1 part cobalt and 1 part manganese, but the industry is shifting towards an 811 mix. Roughly speaking NCM 811 batteries for light passenger EVs require more than 50 kilograms of nickel.

Andrew Cosgrove, senior mining and metals analyst for Bloomberg Intelligence at a recent conference predicted that nickel demand in batteries could outpace that of stainless steel in absolute terms, adding as much as 900,000 additional tonnes per year by 2030. That compares to current annual nickel production of less than 2.5m tonnes.

Click here to continue reading...

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest

MARKET SUMMARY

INDICES

Name Last Change
DOW 26791.90 0.08%
S&P 500 3003.13 0.56%
NASDAQ 8157.09 0.83%
TSX 16435.88 0.36%
TSX-V 542.20 0.00%

Resource Commodities

Name Last Change
Gold 1484.71 0.46%
Silver 17.57 0.11%
Copper 2.63 2.625
Platinum 901.00 0.67%
Oil 53.78 0.28%
Natural Gas 2.32
Uranium 24.88 0.00%