Nickel

Global Market Outlook on Nickel

• In 2021, global nickel consumption has a strong growth, as the world recovered from the economic effects of COVID-19. Strong infrastructure spending increased the demand for nickel in stainless steel and growth in electric vehicles (EVs) resulted in the world’s consumption to grow by almost 2.8 million tons last year, up by 16 percent year-on-year. Consumption of stainless steel grew by 10 percent last year, while consumption in battery grew around 60 percent

• Global mine production is expected to increase from 2.7 million tons in 2021 to over 3.0 million tons in 2022, with 90 percent of this growth constituted by Indonesian production

Nickel Demand Market Outlook

• Mine production during January to July 2022 was 1728.3 kilo tonne, 215 kilo tonne above the comparable 2021 total. Smelter/refinery output in the Chinese economy fell by 44.5 kilo tonne compared the first seven months of 2021 and demand in China was 891.9 kilo tonne, 19.8 kilo tonne higher than in the previous year. In Indonesia, smelter/refinery production in January to July 2022 was 586.2 kilo tonne which is 18 per cent higher than 2021.

Nickel Market Overview – Global

• In 2021, global nickel consumption has a strong growth, as the world recovered from the economic effects of COVID-19. Strong infrastructure spending increased the demand for nickel in stainless steel and growth in electric vehicles (EVs) resulted world consumption grow to almost 2.8 million tons last year, up 16 percent year-on-year. Consumption for stainless steel grew by 10 percent last year, while consumption in battery grew around 60 percent

• In 2022, global finished nickel demand is expected to grow by around 5 percent to reach 2.9 million tons. Demand is expected to continue to grow over the outlook period, however, there is a considerable uncertainty over the forecast. While nickel demand for battery precursors is forecast to grow at over 20 percent annually over the outlook period, there is uncertainty from a burst in global inflation and the impact on world growth from the fallout from the Russian invasion of Ukraine

• In 2021, Indonesian mined production increased to 1.0 million ton, up by over one third from the previous year, largely driven by a need to feed domestic NPI production. Global mine production is expected to increase from 2.7 million ton in 2021 to over 3.0 million ton in 2022, with 90 percent of this growth accounted for by Indonesian production

• The imposition of an export ban in Indonesia in the recent years has proven effective in boosting domestic refined production capability at the expense of Chinese refined production capability. In 2021, Indonesia overtook China to be the world’s leading producer of refined nickel

Nickel Production by Region (2021)

• Mined nickel production in New Caledonia increased by 50 percent Y-o-Y in Q1 2022, while Russian mine production was up 16 percent Y-o-Y. Production in the Philippines showed only a marginal improvement against Q1 2021

• China’s commitment to its zero-COVID policy is another factor contributing to uncertainty in the nickel market. Prices declined in May, with demand from both the stainless steel and battery sectors affected by China’s COVID-19 lockdowns. However, such disruptions can also affect the supply side of the market. Power rationing in China disrupted nickel production, which outweighed the impact of demand disruption. A surge in power prices in China could threaten the viability of some nickel refiners

• US is continuing to pledge support towards the decarbonization movement, with positive benefits for nickel demand. In May, the US Administration announced a $3 billion package to support domestic advanced battery manufacturing in both the EV and stationary storage space. The package will award grants for production of key battery materials, including lithium, cobalt and nickel, and reduce US dependence on China for these materials

Global Nickel Market: Drivers and Constraints

Drivers

Demand from Battery Sector

• Demand for nickel from the battery industry is set to more than double in the medium term. The battery industry currently represents 5–7 percent or 250,000 tons of nickel demand annually. According to the Nickel Institute, this figure is expected to grow to between 400,000 and 600,000 tons by 2025 and that it could go even higher, as the battery industry evolves.

Consumption of Stainless Steel

• Stainless steel still constitutes the majority of global nickel demand, despite the burgeoning electric vehicle (EV) sector. China, thus remains crucial to nickel markets, since it produces close to 60 percent of the world’s stainless steel output. However, power rationing has significantly decreased Chinese stainless steel output in the recent times. In spite of China’s production problems, global stainless steel production in 2021 is still forecast to be 14 percent higher than in 2020, largely supported by government stimulus spending and strong Chinese production in the first half of 2021

Constraints

Supply Disruption

• In 2021, nickel market has been dominated by a tight supply environment, following strong stainless-steel demand globally in the recovery period after the first wave of the Covid-19 pandemic. Additionally, demand from the battery industry was better than expected in 2021. The tight supply environment is expected to continue into 2022

• China has proposed stricter limits on heavy metal pollution, targeting the non-ferrous raw materials sectors involved in processing, lead-battery manufacturing and galvanizing. As for the production chain, from upstream to downstream, stricter scrutiny will translate into more investment in environmental compliance, which will consume a growing proportion of operational costs

Why You Should Buy This Report

This report on nickel industry outlook covers:

• Market intelligence to enable efficient decision-making

• Growth prospects and trends assessment

• Competitive strategy and nickel demand forecast analysis

• Regional and segmental nickel forecast for market evaluation

• COVID-19 impact and how to survive these fast-changing markets