Nickel – Global Industry, Markets & Outlook

With the stainless steel sector accounting for over two-thirds of primary nickel demand, developments in this industry will remain a key driver of nickel consumption. The continued development of the industry in China and Indonesia will be key, as stainless steel mills in both countries are predominantly reliant on primary nickel units, instead of the secondary nickel units contained in scrap used by most mills elsewhere. Between 2017 and 2027, Roskill expects demand for primary nickel by the global stainless steel industry to grow by 2.5% per year. By the end of our forecast period, the industry should still account for 60% of global demand.

The battery sector’s increasing importance will be underpinned by the continued development of electric vehicles as governments worldwide encourage their use as a way of combatting vehicle pollution. Currently, the best technology to provide the combination of energy density and vehicle range is the lithium-ion battery.

Although not all such batteries contain nickel, many do and increasing the nickel content of batteries allows for greater energy density, thus increasing electric vehicles’ range. This will give nickel demand a double boost: one from the greater number of electric vehicles being driven, and the other from the increasing nickel content in these vehicles’ batteries. Roskill therefore expects primary nickel demand from the battery sector to rise by 20% per year between 2017 and 2027 so that by the end of the forecast horizon, the sector should account for 17% of global primary nickel demand.

With demand for battery-grade nickel (in the form of Nickel Sulphate) set to surge, nickel producers are increasingly investigating the possibility of expanding capacity or adding circuits to existing plants in order to alter their end-product. For example, BHP Billiton is adding a circuit to its Nickel West plant that could allow it to produce as much as 45ktpy of nickel in nickel sulphate. Meanwhile, Terrafame in Finland is actively investigating the possibility of upgrading its facility to produce 33ktpy of nickel contained in nickel sulphate as opposed to the Mixed Sulphide Precipitate the company currently produces.

The availability of nickel sulphate will become increasingly important as over the past decade, the increase in primary nickel supply has been driven mostly by Nickel Pig Iron and ferronickel, both aimed at the stainless steel industry. Such products, however, do not represent a commercially-viable feedstock for nickel sulphate, which is produced from intermediates such as nickel matte, powder and briquettes, as well as hydrometallurgical intermediates. The supply of these materials could be limited by the lack of major new sulphide-type deposits and the high capital cost of building hydrometallurgical plants to process lateritic-type ores.