Prices of all key metals used to make electric vehicle batteries are set to increase, according to market observers, as recent mine investment appears insufficient to cope with the expected uptick in demand over the coming years from the battery sector. While for lithium expectations are that as we reach 2022 and beyond there should, at current project adoption rates, be enough supply, the picture looks much tighter for nickel where demand is expected to outweigh supply after 2020. As a result, nickel is expected to become the bottleneck that may impede the march of the EV in the coming decade. There are two main reasons behind the supply shortage in the coming decade: Current underinvestment in nickel projects hindering supply growth while higher adoption rates going forward coupled with a potential switch to the 8:1:1 nickel-manganese-cobalt battery technology would further bolster nickel demand. Despite the LME cash settled nickel contract having risen almost 20% in 2017, and a further 11% since the beginning of 2018 to just above $13,000/mt in early February, nickel is still in a comparatively low price environment. Before February 2015 the LME nickel contract had a price floor of $15,000/mt and averaged just under $20,000/mt… continue reading
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Source: CTRM Center