Nickel, as one of the most expensive metals traded on the LME, is significantly impacted by currency markets. The valuable alloy is largely utilised in the fabrication of stainless steel and lithium-ion batteries. Many investors are finding it difficult to maintain their market position due to rising interest rates and the strong strength of the US dollar.

Where:

The South Pacific Islands - Indonesia and the Philippines - account for more than half of world nickel supply. Russia is the third largest nickel provider, followed by Canada, Australia, and China.

What:

While South Pacific nickel is the greatest contributor to world nickel supply, it is collected from laterite ores, which are fantastic for stainless steel and other alloys but not so great for conversion into Nickel sulphide, which is necessary for Li ion batteries. The nickel derived from nickel sulphide ore, on the other hand, is ideally suited for battery manufacture and is the most sought after. Miners are pouring money into nickel sulphide mining. Recently, Vale announced a C$ 150 million investments to prolong the life of the Thompson mine in Manitoba, allowing it to operate well beyond 2040. Excellent nickel sulphide mines may be found in the Canadian provinces of Newfoundland and Labrador, as well as the Sudbury mine in Ontario.

How:

Investors and manufacturers are concerned not just about metal quality, but also about sourcing battery metals in a sustainable manner. According to BHP Minerals Australia President Edgar Basto, BHP produces some of the lowest carbon intensity nickel in the world and is on track to achieve net zero emissions. Canadian mines also meet the majority of the environmental and social criteria required by American EV producers.

Demand:

According to the IEA, nickel demand will reach 4.6 million metric tonnes by 2030 and 6.3 million metric tonnes by 2040. EVs and low-carbon energy generation would utilise more nickel than all other applications combined at this rate.

On the stainless-steel front, US cold rolled stainless steel output will be restrained throughout 2023 but will gradually improve towards the end. Asia is identified as the largest nickel market, accounting for more than 82% of worldwide nickel demand, with China accounting for 60%.

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Written By: Thegoldstocks.com

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