Challenges & Prospects of Nickel Market within Battery Materials Segment

Nickel is an important metal resource used in a wide variety of commodities which represent various, often high-tech, industrial, domestic, military and other sectors. Among them, the sector of rechargeable battery systems is one of the most interesting despite the fact that only about 5% of produced nickel is used in batteries. Of course, nickel is not without strong competition in this sector. Nickel/metal hydride (NiMH) rechargeable batteries are popular in consumer electronics, transportation, power tools, emergency power supply, and other solutions. They are superior to highly toxic Ni-Cd or alkaline batteries, but face strong competition on behalf of rival Li-ion batteries as the current shift to lithium ion products is evident. The market for Li-ion batteries significantly surpasses that for Ni-Cd/NiMH batteries in volume terms (6 bn cells vs 2 bn cells, respectively) and value terms ($25 bn against c. 3 bn, respectively). Since the energy density of NiMH batteries is lower as compared to Li-ion batteries, NiMH batteries demonstrate lower mileage range between the charges in transport applications. This limits the use of NiMH batteries in electric vehicles (less than 1% of produced nickel is used in electric vehicles). As a result, scientists worldwide are putting their best efforts to solve this problem of NiMH batteries. However, the use of lithium and nickel is interconnected since nickel sulfate powder is indispensable in the cathode formulation of Li-ion batteries.

Among other nickel-related limitations, one can mention public health concerns associated with nickel allergy and dermatitis, which even became the subject of EU directives. Despite these and some other barriers (mostly linked to mining/refining operations and behaviours of the consumption markets), nickel battery application remains a prospective sector, which attracts different players. For instance, just recently BASF and Norilsk Nickel (Nornickel) announced a plan to build a battery materials production facility in Finland to serve the European automotive market and supply 300,000 electric vehicles with for battery materials. The idea behind this and similar projects is to create complete value production chains. The BASF-Nornickel project is intended to link nickel resources of the nearby nickel/cobalt refinery owned by Nornickel, BASF’s technological prowess, locally available renewable energy sources, as well as proximity to the European car markets. In the light of the possible shortage of lithium, nickel-based battery materials projects are fully commercially viable. However, the risk for this particular project may increase if sanctions are imposed against Nornickel, as it had happened with aluminium giant Rusal.

In total, the balance between global nickel demand and supply constantly fluctuates from positive to negative. Currently, both demand and supply exceed two million tonnes per year with the balance being negative. The same refers to the production shares of main nickel-producing countries as these shares constantly fluctuate. The fluctuations of the nickel supply and demand balance might pose a threat for further development of the sector of nickel-based battery materials.

More information on the global nickel market can be found in the in-demand research report “Nickel: 2019 World Market Review and Forecast to 2028”.