Critical Minerals and Energy Intelligence

Nickel Market in July: Supply Concerns and Rising Demand

We just published a piece on the market in Q2, however, due to price movements this month we felt it was worth another article to highlight just how fragile nickel’s supply chain is and thus the potential for disruption.

On July 16, 2021, nickel prices on the London Metal Exchange surged to a one-year high, reaching $14,200 per tonne during the day before closing at $14,090. This increase was driven by investor apprehensions about potential supply shortages and robust demand, particularly from the electric vehicle (EV) sector.

Several factors contributed to the tightening nickel supply, including the operational issues suffered by majors, Nornickel and Glencore, earlier this year, but also weather related disruptions. In the Philippines, heavy rainfall and logistical issues led to a projected 10% decrease in nickel output for the year.

Implications for the Electric Vehicle Industry

Most investors continue to think lithium and cobalt when they think of battery metals but let’s remember that Nickel is a critical component in lithium-ion batteries. No battery grade nickel means no new EVs. For investors interested in the clean energy and green tech investing themes, consider that the surge in nickel prices and supply concerns has once again underscored the importance of securing stable and sustainable nickel sources to support the growing EV market and battery storage sector. Until we see more mines in stable jurisdictions, the nickel market’s sensitivity to supply disruptions is likely to remain high – especially with increasing demand from the continued electrification of all things.

Anthony Milewski

Chairman, Nickel 28 Capital

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