Global finished nickel demand grew by around 5 percent in 2022, driven primarily by an increase in the demand for stainless steel and other nickel-based alloys.
A major contributor was the electric vehicle (EV) market, where a significant quantity of nickel is used for making batteries. It must, however, be noted that this projection is subject to change based on economic and market conditions.
That said, the global nickel application is currently segmented into the following categories :
Stainless steel - 69%
Batteries - 13%
Alloys and superalloys - 7%
Electroplating - 5%
Special steels - 5%
Others - 1%
Currently, the nickel market is facing a supply deficit, driven by a combination of strong demand and disruptions to supply caused by factors such as weather events and government regulations. It has led to a rise in nickel prices. Additionally, there is a growing focus on sustainable nickel mining practices, which could potentially impact the supply of nickel in the future.
However, as the demand for nickel is closely tied to the growth of the EV market, which is highly dependent on government policies, economic conditions, and technological advancements, it is difficult to predict the future market conditions for nickel with certainty.
The demand for nickel is affected by several factors, including economic growth, industrialization, and technological advancements. An increase in economic growth and industrialization generally leads to increased demand for nickel, as it is used in many industrial and manufacturing processes. Technological advancements, such as the development of electric vehicles and renewable energy sources, also increase the demand for nickel, as it is a key component in the production of batteries and other components.
According to calculations of Beroe, various factors contribute to the growth of the global finished nickel demand to reach 2.9 million tons in the year 2022.
Some of the key factors responsible for the surge in demand for 2022 - 2023 are :
Increase in demand for stainless steel
Historically, nickel has been in high demand for its use in stainless steel production and various industrial applications. However, the nickel market has also been subject to fluctuations due to changes in supply and demand and economic and political factors.
The production of stainless steel increased by 10.6% annually to 56.3 million metric tonnes in 2021, according to the International Stainless Steel Forum (ISSF).
Increase in demand for EVs (electric vehicles)
In recent years, there has been an increase in demand for nickel, particularly for electric vehicle (EV) batteries. The increasing popularity of EVs has led to a rise in demand for nickel, as it is a key component in the batteries used in these vehicles.
Prospects may arise from the rising demand for electric vehicles and the expanding use of nickel in the medical sector.
However, there is a lot of uncertainty surrounding the forecasted demand for nickel or battery precursors, which is expected to grow at a rate of over 20% per year. This uncertainty is brought on by global inflation and the impact of the Russian invasion of Ukraine.
Due to the recession, investors have been leaving the metal sector, which has decreased trading activity. The LME does not currently prohibit Russian metal imports. However, a falling U.S. Dollar Index fuels the increase in base metal prices.
Indonesia emerging as a hub for nickel production :
Recent years have seen success in Indonesia by introducing an export restriction, which has increased domestic refined production capability at the expense of Chinese refined manufacturing capabilities. Indonesia surpassed China to become the world's largest producer of refined nickel in 2021.
The world's mining production saw rise from 2.7 million tonnes in 2021 to over 3.0 million tonnes in 2022, with Indonesian production accounting for 90% of this expansion.
As per the category intelligence report published by procurement intelligence SaaS Beroe, the price overview of nickel for the projected period ( 2022-2023) is expected to rise and stabilize in the medium term because opinions are significantly impacted by the global macroeconomic and geopolitical conditions monitored by the global monetary policy. Chinese demand is anticipated to rise because of an increase in EVs now that most smelters have resumed production following maintenance.
In the long run, supply disruption is anticipated with soaring nickel demand from the battery sector in response to soaring EV sales globally. The need for alternate feed has left customers scurrying to fulfill their contractual responsibilities. To meet demand from the manufacturing, oil, gas, and construction industries, nickel prices are anticipated to climb parallel with stainless steel demand. Prices are anticipated to steady as market recovery is anticipated across several sectors.
Supply market dynamics
Mined nickel production in New Caledonia increased by 50 percent year-on-year in Q1 2022, while the Russian mining production was up 16 percent year-on-year.
Production in the Philippines, however, showed only a marginal improvement against Q1 2021.
The current global nickel demand has grown by around five percent in the year 2022 because of the increase in demand for stainless steel.
According to Beroe, the global finished nickel demand may reach 2.9 million tons in 2022 due to the contribution of various factors like economic growth, technological advancements, industrialization, etc.
Source: https://www.beroeinc.com/blog/global-finished-nickel-demand-grew-by-around-5-percent-in-2022/
Some of the factors that are driving the global finished nickel demand are the increase in the demand for stainless steel, which has various industrial applications, a significant increase in the demand for batteries of E.V.s (electric vehicles), which are becoming more popular daily, restriction on export by Indonesia, which has surpassed China in 2021 to become the largest producer of refined nickel in the world.
The introduction of E.V.s has increased the demand for finished nickel. The consumption of finished nickel has been segmented into different categories:
Stainless steel industries use 69 percent of finished nickel
Batteries for E.V.s use 13 percent of finished nickel
Alloys and superalloys use 7 percent
Electroplating industries use 5 percent nickel
Special steels and other industries use one percent of finished nickel each
Source:https://www.beroeinc.com/blog/global-finished-nickel-demand-grew-by-around-5-percent-in-2022/
The COVID-19 pandemic had different impacts on different industries. The nickel demand for the stainless steel industries decreased during the pandemic as the production rate was reduced.
The E.V.s (electric vehicles) became more popular during the pandemic, and as a result, the demand of the E.V. industries for finished nickel demand increased. Overall, the pandemic had a mixed impact on global finished nickel demand.
The emerging economies require finished nickel in significant amounts as nickel is used in various sectors like stainless steel production, the production of batteries for electric vehicles, transportation, infrastructure development, etc.
The production of stainless steel consumes the highest percentage of the global finished nickel. The popularity of electric vehicles in recent times has also increased the percentage of finished nickel used in producing E.V. batteries.
Indonesia tops the list of largest producers of finished nickel as it surpassed China in 2021 to be the largest producer of refined nickel.
The other countries following Indonesia on the list are the Philippines, Russia, New Caledonia, Australia, and Canada. These countries are the largest producers of finished nickel.
Source: https://www.greencarcongress.com/2021/05/20210502-roskill.html
As new sectors, such as batteries for electric vehicles, require finished nickel, prices are expected to rise. The rise will be parallel to the demand for stainless steel. Owing to the dependencies in multiple domains, the supply chain for finished nickel tends to be managed by every contributing factor of the supply chain.
According to the category intelligence report published by Beroe Inc, the nickel price is expected to rise in 2022-23. The price is expected to stabilize in the medium term because of the conditions monitored by global monetary policy.
The demand for nickel is expected to rise in the Chinese market because of the growing popularity of E.V.s.
Source: https://www.beroeinc.com/espresso/138-reshoring-gains-momentum/
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The terms “reserves” and “resources” are used to describe the availability of raw materials. The Committee for Mineral Reserves International Reporting Standards defines the terms as follows: “A mineral resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. A mineral reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource.”
‘Reserves’ imply an increased level of knowledge and confidence. Mining companies continuously convert resources into reserves by exploration. In most cases therefore, limitations in the availability of raw materials are less an issue of whether there is enough raw material in the ground, than whether there is enough production capacity available in a short time frame to satisfy a sharp increase in demand.
The world’s nickel resources are currently estimated at almost 350 million tons.
Australia, Indonesia, South Africa, Russia and Canada account for more than 50% of the global nickel resources. Economic concentrations of nickel occur in sulphide and in laterite-type ore deposits.
Despite the fact that nearly 80% of all nickel historically mined was extracted over the past three decades, known nickel reserves and resources have also steadily grown. Various parameters play a role in this evolution, including better knowledge of new deposits in remote areas and increased exploration activities by mining companies, driven by attractive commodity prices. Improved technologies in mining, smelting and refining, as well as increased capacities, also allow for lower-grade nickel ore to be processed. Decreasing ore grades are therefore not necessarily a sign of diminishing resources, but a reflection of innovation and improvements made in mining and process technology.
There are also reckoned to be significant nickel deposits in the deep sea. Manganese nodules, which are found on the deep-sea floor, contain significant amounts of nickel. Recent estimates indicate more than 300 million tons of nickel contained in such deposits. The development of deep-sea mining technologies is expected to facilitate access to these resources in future.