Posted on 01 Mar 2022
The global nickel supply deficit started last year is poised to accelerate as Western sanctions on Russia disrupt exports from Moscow-based Nornickel, according to TrendForce.
The company was the largest high-grade nickel supplier in 2021 with a global market share of 22%, according to Fitch Ratings. Sanctions targeting Russian mineral exports add another layer of pressure for battery producers, EV makers and then consumers, Kallanish notes.
Battery-grade nickel sulphate has been increasingly demanded due to the rising penetration rates of high-nickel ternary batteries in EVs. However, affected by the pandemic and other reasons, the production was behind schedule for several major producers, resulting in the shortage of nickel. According to the World Bureau of Metal Statistics (WBMS), the global nickel supply deficit was of 144,300 tonnes in 2021. Nickel inventory at London Metal Exchange (LME) has decreased from over 260,000 t to about 82,000 t since April of 2021.
Lower supply in an already tight market is triggering prices to rise further. LME spot prices for nickel reached a ten-year record high on 25 February trading at over $25,000/t.
However, despite the war, Western sanctions don’t seem to impact the relationship between China and Russia, with exports to China likely to increase.
“We do not support the use of sanctions to solve problems, and we are even more opposed to unilateral sanctions that have no basis in international law. China and Russia will continue to carry out normal trade cooperation in the spirit of mutual respect, equality and mutual benefit,” Wang Wenbin, spokesperson at the Foreign Ministry of China, said on 28 February.
Consultancy company Antaike predicts Chinese nickel demand will increase 7.3% this year to 1.66 million t. The country, which is already the largest consumer of nickel worldwide, accounted for 18% of Russia’s nickel export last year.
Source:Kallanish
