Nickel price surged to hit a decade high on Tuesday on robust demand with inventories’ continued to decline.
Benchmark nickel futures on the London Metal Exchanged advanced 4.87% to $21,811.50 a tonne, the highest since January 2012.
“Stronger electronic vehicle sales and restocking demand from auto manufacturers triggered fresh buying in nickel and other battery materials,” analysts at ANZ Research wrote in a note on Wednesday
S&P Global Market Intelligence forecasts on 31 December that global primary nickel consumption to rebound year-on-year due to stainless steel capacity expansions in China and Indonesia.
“Demand outside China is expected to be the main driver of global growth in volume terms in 2022,” the firm said, adding the global consumption is expected to rise at a compound annual growth rate of about 7% between 2020 and 2025.
“The battery sector’s nickel demand is also expected to accelerate substantially, with many predicting it to near 35% of total demand by the end of the decade,” the firm said.
Tesla has signed a deal to buy 75,000 tonnes nickel concentrate for battery cell production from Talon Metals’ Tamarack Nickel Project in the central Minnesota.
Inventories of the metal – used mostly in stainless steel – on the LME continued to decline, falling below 100,000 tonnes, according to Shanghai Metal Market (SMM).
Stainless steel market is expected to be subdued ahead of the Chinese New Year (CNY) holiday. China is the world’s largest stainless steel producer.
“Some traders in the market will start to take holidays after mid-January, and the downstream users barely restock raw materials before the CNY, so the transactions in the stainless-steel market gradually lighten,” according to SMM.
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