Association predicts nickel demand boost in 2023

Delegates to Lisbon-based International Nickel Study Group (INSG) meetings held in mid-October see some bright spots in nickel demand in 2023, citing a stainless steel sector rebound and continued growth in electric vehicle (EV) battery demand.

INSG says industry representatives from member countries, observers and several international organizations participated in the meetings. Several of the participants cited “the combined impact of the COVID-19 pandemic and the situation in Ukraine” as having “resulted in energy constraints, higher inflation and lower economic growth,” which they say “has led to increased uncertainty in the global commodity markets.”

The Brussels-based World Stainless Association (formerly the International Stainless Steel Forum, or ISSF) released figures for the first three months of 2022 showing stainless steel melt shop production decreased by 3.8 percent year-on-year in that timeframe to 14.5 million metric tons.

For all of 2022, the INSG says it expects negative growth in the stainless steel sector but increasing consumption of nickel in EV batteries. In 2023, both sectors are projected to grow, says the group.

The difficult conditions in the stainless sector have prompted recyclers of that metal to secure financing to weather the difficulty. Investments in nickel-bearing battery recycling, meanwhile, have been steady and growing.

INSG says it expects nickel pig iron (NPI) production to continue to rise in Indonesia, but to further decline in China. “The conversion of Indonesian NPI to nickel matte in the country is anticipated to surge,” writes the group.

Intermediate products such as nickel matte made in Indonesia with NPI will continue to be “exported to China to be further processed into nickel sulphate to produce EV batteries,” according to INSG.

World primary nickel production was 2.61 million metric tons in 2021 and is forecast to rise above 3.03 million metric tons in 2022 and then rise another 11.5 percent to 3.387 million metric tons in 2023. That forecast, says INSG, does not include “any adjustment factor for possible production disruptions.”

Based on nickel consumption figures and forecasts, INSG writes, “The implicit market balances are therefore a deficit of 163,000 metric tons in 2021 and surpluses of 144,000 metric tons in 2022 and 171,000 metric tons in 2023.”

Historically, says INSG, market surpluses have been linked to London Metal Exchange LME deliverable/Class I nickel. However, in 2023 the surplus will be mainly due to Class II and nickel chemicals--principally nickel sulphate, which is used in batteries.

The next INSG meetings have been scheduled for April 2023.