This Insight focuses on current nickel use in the battery sector, how it has changed in recent years, what is driving these changes and what our base case demand forecasts for nickel are.
CRU calculates that around 5% of nickel demand came from the battery sector in 2019. However, we forecast that growth will be rapid and the battery sectors use of primary nickel will reach 870,000 tonnes by 2030 and 1.5 Mt by 2040. The evolution of the electric vehicle sector and the differing battery technologies within it, will increasingly shape the nickel market and represent a third of total demand by 2040.
There has been fierce debate surrounding the outlook for nickel usage in lithium batteries over the past few years. CRU has invested a large amount of time and resources into developing in-house long-term modelling capabilities for the automotive sector. This work has been undertaken not only to support our analysis of traditional automotive commodities like steel and aluminium, but also to shed light on the development and growth of the nascent electric vehicle (EV) sector and to better understand the resultant long-term impact for a wide range of commodities including cobalt, lithium, nickel, graphite and PGMs.
Of the various battery chemistries in widespread production four use nickel: nickel metal hydride (NiMH), nickel cadmium (NiCd), nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminium oxide (NCA). Here, we will focus on NMC and NCA, which amount to more than 95% of nickel contained in batteries. NMC and NCA are lithium-ion batteries (LIBs), but NiMH and NiCd are not and we believe more applications will move towards using LIBs in the future.
Sourcing of nickel units for cathode markets shows high degree of flexibility
CRU’s in-house nickel sulphate supply model covers nine separate key processing routes. These can be classified into four categories, based on the raw materials used; sulphide ore, nickel briquettes, laterite ore and recycled nickel. Currently, sulphide ore, nickel briquettes are the dominate routes, but laterite ore and recycled nickel are growing.
