London nickel price flies to 11-year high as EV uptake dwindles stockpiles

Nickel on the London Metal Exchange yesterday reached a new high of US$24,610 per tonne, a level last traded in 2011, as demand for the crucial battery ingredient from the electric vehicle (EV) sector continued to eat into stockpiles.

The growing likelihood of sanctions on Russia, which accounts for about 7% of global nickel production and is a major exporter to both Western and Chinese markets, is part of the equation, but the underlying driver of the price rally is electric, according to Reuters journalist Andy Home.

Adamas Intelligence estimate that a record 286.2GWh of passenger EV battery capacity was deployed onto roads globally last year – a 113% increase on 2020 as new sales remained strong in main market China and exploded in Europe.

While the EV battery sector remains a smaller user of nickel than the stainless steel sector, it is growing at a much faster pace. Last year, 54% of deployed battery capacity used high nickel content cathode chemistry, according to Adamas. Low nickel chemistry accounted for 26% and no nickel products just 20%.

“The EV revolution seems to be fast approaching a state of critical mass, which is translating into record-breaking price runs for cathode inputs such as nickel and cobalt and, of course, lithium itself,” Home said.

Rising global EV sales in the last year have pushed the price of the lithium-rich raw material spodumene up by 478.4% between January 2021 and January 2022, according to figures from Benchmark Mineral Intelligence.