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nIcKeL conFeRence ReVIeW

Are we at the beginning

of a nickel decade?

strongly performing spot price and solid share price performance have placed the Australian
A nickel industry in its strongest position for more than a decade. The enthusiasm for the metal
was reinforced on October 5 when more than 450 delegates arrived at the Pan Pacific Perth for the
Australian Nickel Conference, making it the largest edition of the 27-year-old forum. Paydirt delivers
comprehensive coverage of the event, including the keynote presentations from Wood Mackenzie
principal nickel analyst Angela Durrant and West Australian Minister for Mines Bill Johnston

ickel prices are set for sharp rise in $US19,440/t by 2026, followed by even Durrant said.
Nthe second half of the decade as de- higher prices of $US21,000/t to 2029. Despite Tsingshan’s move, Wood Mac-
mand growth and supply constraints con- “Primary supply will struggle to aver- kenzie is forecasting sulphide miners will
verge to create a gulf in available metal, age annual growth of 2% a year and by remain the primary source of supply for
according to Wood Mackenzie principal 2026 the market will need to find new nickel sulphate producers, accounting
nickel analyst Angela Durrant. nickel. By 2031, the requirement for new for 40% of demand against 37% from lat-
Speaking to a packed opening session nickel will be 570,000 tpa, with 976,000 erite deposits.
of the Australian Nickel Conference, Dur- tpa needed by 2040. While Tsingshan’s move has broken
rant said the recent surge in nickel prices “However, even at current prices nickel sulphide producers’ total domi-
– which has seen spot prices rise from [$US18-19,000/t] we have not seen nance of nickel sulphate supply, Durrant
$US11,000/t in March 2020 to more than banks putting their hands in their pockets expects growing demand from the EV
$US18,500/t in September – may abate to finance new projects, which signals battery market to place continued pres-
over the next two years as the market there is still much caution.” sure on the nickel price.
heads into slight oversupply. However, The forecast will be welcomed by ASX- “It is increasingly clear that nickel pric-
with increasing demand from the EV sec- listed nickel miners whose price climbs es are being buoyed by the energy tran-
tor, she identified 2025 as a tipping point were interrupted in March when Chinese sition,” she said.
for nickel sulphate demand and therefore nickel major Tsingshan announced it Durrant said total nickel demand
spot nickel prices. would convert nickel pig iron (NPI) ca- would double between 2020 and 2040,
“This year, we expect nickel sulphate pacity in Indonesia to nickel matte pro- by which time EVs and batteries will ac-
production will actually exceed demand duction, making a product more appeal- count for 30% of demand, up from 7% in
and we expect this will continue until ing to battery makers. 2020. While stainless steel will remain
2025; this is the point when new nickel “The increase in supply this year is the largest first use market, its share of
sulphate capacity is needed,” Durrant largely to do with Tsingshan’s commit- nickel demand will fall from 70% to 55%
explained. ment from its converted NPI lines in over the same period.
“Our current outlook for nickel demand Indonesia, and the commencement of Not only does Wood Mackenzie expect
is one of tightness. Following the stag- production from HPAL plants in Indo- the global EV rollout to gather pace – it is
nation in demand of 2020, we estimate nesia,” Durrant said. “While we expect, forecasting 49 million EV sales by 2040,
17.3% growth in 2021, firmly bringing the once these shipments commence, sul- up from 3 million this year – but that bat-
market back into balance after last year’s phate prices to decline, for nickel the tery chemistry will also favour nickel pro-
surplus. We estimate an annual average fundamentals remain very positive and ducers, with the shift away from NCM532
price of $US18,575/t. The strength in prices will remain around current levels (five parts nickel to three parts cobalt, to
prices will continue in 2022 before falling throughout 2022.” two parts manganese) and NCM622 to-
as small surpluses emerge in 2023 and “The announcement by Tsingshan… wards NCM811.
2024. From 2025, the market will experi- sent the market into a spin, breaking the Durrant said it was expected that
ence a six-year period of price-support- previous view that the market would be NCM811 and LFP batteries would pro-
ing deficits averaging around 60,000 tpa oversupplied with NPI, and we had no vide the majority of required gigawatt
through to 2030. idea where nickel sulphate supply would hours for EV batteries from 2030 on-
“We expect the deficits through to come from for batteries, Tsingshan had wards.
2030 to support annual average prices of effectively come up with the answer,” “The progressive dominance of 811 will

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