Global base metals markets were weak throughout 2019, as trade hostility between China and the US drove both aluminum and copper prices to two-year lows, signaling a weak demand outlook for manufacturing commodities and a looming economic slowdown as the decade came to a close. But one outlier, nickel, defied the downward pressure other base metals markets saw. In September, nickel reached its highest price in five years, trading at over $18,000 per ton. By October, nickel prices were up nearly 70% year over year. The driving source of nickel’s growing popularity? The electric vehicle (EV) industry.
Though about 70% of annual nickel output is used in stainless steel production, the metal is also commonly found in the production of rechargeable lithium-ion batteries. These batteries are primarily composed of nickel and act as the primary source of power in electric vehicles. During the first half of 2019, the global EV industry absorbed over 27,000 tons of nickel, representing a 79% year-over-year increase and 21% of global demand for the metal.1 Increasingly high expectations for further growth in the EV market have been powered by policy and environmental regulations around the world. Nearly all major markets have fuel and emission regulations in place, and approximately 20 major cities worldwide have enacted plans to ban gasoline-powered cars by 2030 or sooner.2
In conjunction with increasing EV
production, nickel usage and intensity per battery has also grown.
Higher nickel content in batteries for electric vehicles both increases
energy density and extends vehicle range, making nickel the preferred
material among other battery commodities such as cobalt and lithium.3 Comparatively, cobalt and lithium prices were down 36% and 29% in 2019, respectively, largely driven by oversupply.