The recent escalation of the conflict between Russia and Ukraine, in addition to the surge in natural gas and crude oil, may also impact the supply of non-ferrous metals such as aluminum, nickel and copper. According to TrendForce, nickel is a key upstream raw material for electric vehicle power battery manufacturing, mainly manufacturing ternary cathode materials. In 2021, the global nickel mine production will be about 2.7 million metal tons. The main producing countries are Indonesia, the Philippines and Russia. The total output is about 9% (including low, medium and high grade), ranking third.
At present, the penetration rate of the new energy vehicle market is accelerating, and ternary power batteries account for nearly half of the market share, which means that the demand for nickel, the upstream raw material for automotive power batteries, will become stronger. The continued deterioration may affect the global nickel supply in the short term, push up nickel prices, and further increase the cost pressure on terminals such as the electric vehicle industry.
TrendForce said that in the medium to long term, most of the new nickel ore smelting and processing projects in recent years are located in Indonesia and other places. In 2021, Indonesia’s nickel ore production will account for about 37% of the world’s total production. Half a year will improve nickel supply and demand. TrendForce specifically mentioned that Indonesia’s export ban on mining last year only prohibited the export of raw ore, but did not prohibit Chinese companies such as Huayou Cobalt, Tsingshan Group, Ningbo Liqin, and GEM from investing in Indonesia to build nickel ore processing and smelting projects. The smelting of raw ores into concentrates, as well as further processed products, are not affected by the export ban.
From the perspective of the supply situation of manufacturers, the top five large nickel ore manufacturers in the world, the Russian industry Norilsk, supplies about 9% of the world’s nickel raw materials, and the production and processing of nickel ore is located in Russia, accounting for about 90% of Russia’s overall output, and the output of high-grade nickel is It accounts for 22% of the world’s total (according to nickel content, it can be divided into high-grade nickel, medium-grade nickel and low-grade nickel, high-grade nickel refers to Ni content ≥ 10%), ranking first in the world. This is followed by China’s Jinchuan with 17%, Switzerland’s Glencore with 13%, and Brazil’s Vale with 12%. TrendForce believes that, according to the conflict situation between Russia and Ukraine, if Europe and the United States impose sanctions on Russia, due to the high concentration of production and processing in Norilsk, it may cause a change in the flow of Russian nickel, that is, the Russian nickel that originally flowed into Europe and the United States may flow into China in large quantities, so the sanctions will lead to a change in the flow of nickel in Russia. Market share decline is less likely.
TrendForce said that at present, high-nickel-based ternary cathode materials (mainly referring to ternary materials with high nickel content such as NCM622, NCM811, and NCA) have the advantages of higher energy density and less precious metal cobalt raw materials. The market share of cathode materials has increased rapidly, from 10% in 2019 to nearly 40% in 2021. The development of high nickelization means that the consumption demand for nickel per ton of ternary cathode materials increases. With the accelerated penetration rate of new energy vehicles in China, Europe and the United States, the market demand for power lithium batteries is strong, and the overall nickel inventory continues to decline. Currently, global refining Only 100,000 tons of nickel stockpiles remain. Under the tight supply and demand, the spot market price of electrolytic nickel in China will reach 130,000 to 150,000 yuan per ton in 2021, and it will rise to 160,000 to 170,000 yuan per ton in early 2022. 10,000 RMB, the possibility of continuous rise cannot be ruled out.