If push comes to shove, I think Kyle Bass still has his 20 million U.S. nickels.
From S&P Global Platts, December 30, a very smart look at the ins and outs of what is, at the moment, a critical metal:
As many countries shift towards achieving a more sustainable future, major economies are also adopting and promoting electric vehicles in an effort to reduce carbon emissions from traditional internal-combustion engine, and ultimately help the transport and power sectors contribute towards reaching the 2-degree C Paris Agreement goal.
One of the key commodities to realizing this ambition is nickel. Unlike other battery materials such as cobalt and lithium, nickel is unique in not being primarily driven by global battery demand. About 70% of the world's nickel production is consumed by the stainless steel sector, while batteries take up a modest 5%.
S&P Global Market Intelligence forecasts global primary nickel consumption to rebound year-on-year due to stainless steel capacity expansions in China and Indonesia. Demand outside China is expected to be the main driver of global growth in volume terms in 2022 and global consumption is forecasted to rise at a compound annual growth rate of about 7% between 2020 and 2025.
The battery sector's nickel demand is also expected to accelerate substantially, with many predicting it to near 35% of total demand by the end of the decade.
But while based on the above supply of nickel seems abundant, the production of nickel-rich cathodes in lithium-ion batteries requires a more stringent, high-purity Class I nickel (i.e. greater than 99.8% purity) as feedstock to produce the key ingredient: nickel sulfate. Traditional stainless steel feed of nickel pig iron (NPI) and laterite ores have not been suitable for the production of such batteries.
Concerns surrounding the availability of high-grade nickel supply to achieve sustainability goals of governments and original equipment manufacturers have been growing for some time. Developments and solutions have surfaced in the industry this year as the market adapted to rising battery metals demand.
One such development has been the conversion of NPI into matte, a suitable feedstock to produce nickel sulfate—but this solution has raised a number of questions and concerns, including the high carbon intensity of the conversion process and whether non-Chinese OEMs will accept such a feedstock within their supply chains.
The role of nickel amid the 'green' revolution
There has been a notable increase in consumers opting for electric vehicles over traditional internal combustion engine vehicles.
In 2020, 75% of the new vehicle sales in Norway's Oslo were EVs—a major shift from 2010, when 75% of the new private vehicle were diesel. China's Shenzhen was also the first city in the world to make its buses fully electric in 2017.
Latest statistics from China Association of Automobile Manufacturers showed that total new energy vehicle production from January to November broke historical records at 3.02 million units —growing 167.4% in comparison with the same period in 2020 at 1.28 million units. NEV sales for the same period surged 166.8% to 2.99 million units.
CAAM projected 2022 annual NEV sales to hit 5 million units, up 47% year on year. China's Electronics Chamber of Commerce and National Federation of Industry and Commerce Automobile Dealers have raised EV sales forecasts thrice this year, with the latest projection released Dec. 14 looking at a total 2021 annual sales of 3.4 million units.
According to International Energy Agency's Global EV Outlook 2021, the number of EVs on the road across the globe hit 10 million in 2020, a 43% increase from 2019. A Bloomberg New Energy Finance report, meanwhile, projects global passenger EV sales to rise from 3 million in 2020 to 66 million in 2040, even without further policy support.
Nickel is expected to play an essential role amid spectacular projections in EV growth and revolutionary changes in the future of travel. Nickel increases an EV's energy density and therefore the overall driving range. As car manufacturers improved on the energy density of batteries over the years, configurations of batteries have also evolved—from NMC 3-3-3 (three parts nickel, manganese and cobalt) to the latest NMC 8-1-1 (eight parts nickel, one part manganese and cobalt).
But there's more to the supply concerns than just the projected increase in nickel demand....
....MUCH MORE
Related:
2021: ICYMI: "The king of nickel is betting big on a green future in batteries"
No, not Kyle Bass, though as far as I know he still has his nickels.*
