Potential Breakthrough for Nickel Supply
A noteworthy event last week was a 13% decline in nickel prices. This was a result of an announcement by China’s Tsingshan Holding Group (the world’s largest stainless steel producer) that they have developed a new technology/manufacturing process to convert nickel pig iron into a product suitable for EV batteries. We consider this to be a major development as, until recently, only Class 1 (sulphide ore), which accounts for 50% of nickel supply, was considered to be suitable for EV batteries. Due to their higher iron content and impurities, Class 2 nickel (ferronickel and nickel pig iron) was not considered to be suitable. Tsingshan’s new process could potentially double the supply of nickel for EV batteries, and ease concerns of a nickel shortage for batteries. Last month, Elon Musk had stated that nickel supply was a major concern. We had expected this news to result in a larger drop in nickel prices.