Nickel Rout Signals Warning For Energy Transition

The surge in nickel usage for electric vehicles (EVs) since July 2020, reaching 290,000 tons last year according to Adamas Intelligence, contrasts sharply with recent actions by major miners such as BHP, Anglo American, Glencore, and Wyloo.

Nickel plays a crucial role in battery technology, enhancing the energy density of batteries and allowing EVs to store more power and extend their range compared to alternative chemistries like lithium iron phosphate.

These companies, including Andrew Forrest's Wyloo, have been mothballing, writing down, or attempting to sell their nickel operations, as highlighted by Antony Currie in an opinion piece for Reuters Breakingviews.

The primary culprit behind this trend is the plummeting price of nickel, which dropped below $16,000 a ton on the London Metal Exchange by February, nearly halving from its level a year earlier.

This significant decline pushed half of the world's nickel production into the red, according to BHP's calculations.

While there has been a modest recovery to $17,700 a ton in recent weeks, the upheavals in the nickel market offer valuable lessons for the West's aspirations for energy transition, especially given that two-thirds of nickel consumption worldwide is in steelmaking.

Nickel plays a crucial role in battery technology, enhancing the energy density of batteries and allowing EVs to store more power and extend their range compared to alternative chemistries like lithium iron phosphate.

Each power pack that utilizes nickel contains up to 50 kilograms of the metal. Over the past three years, nickel supply has surged by more than two-fifths, driven primarily by Indonesia, which increased its output of nickel tenfold over the past decade.

In 2023, Indonesia alone accounted for 50% of the 3.6 million tons of nickel excavated globally.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem