Nickel use in batteries will grow 18% this year

Sumitomo Metal Mining, Japan's largest nickel smelter, forecast on Tuesday that global nickel use in batteries will rise 18% this year from 2020, MiningWeekly reported, citing Reuters. Sumitomo Metals, which supplies electrolytic nickel for Panasonic lithium-ion batteries assembled in Tesla electric vehicles, said demand for rechargeable nickel would increase from 193,000 tons in 2020 to 228,000 tons in 2021. Nickel is mainly used in the production of stainless steel, but it is also a very important material for the lithium-ion batteries that power electric cars, and demand is expected to accelerate in the future. "Despite the COVID-19 outbreak, sales of electric vehicles are growing rapidly, especially in China," said Yusuke Niwa, general manager of Sumitomo Nickel's sales and raw materials division.

"The recent fall in nickel stocks on the London Metal Exchange (LME) reflects higher demand for the metal for batteries," he said, adding that nickel stocks had fallen by more than 30,000 tonnes in the past two months. The company also forecast that the global nickel market surplus will shrink from 132,000 tonnes in 2020 to 58,000 tonnes this year, with strong demand for nickel from the stainless steel industry offsetting the increase in Indonesian ferro-nickel production. Global nickel demand in 2021 is expected to be 2.58 million tons, up 9.2%, while supply is expected to be 2.638 million tons, up 5.8%.

In the first four months of the year, the global Nickel market was 34,900 tonnes short, according to the International Nickel Study Group. "But we expect a surplus in the second half as more projects in Indonesia come on stream," Niwa said.Nickel demand in Japan is expected to rise 15.7 percent to 167,400 tons this year, while supply is expected to fall 2.4 percent to 165,800 tons.