In a newly-released report on the nickel sulfate industry, Roskill forecasts that the expanding EV industry will become the key driver of growth in nickel demand.
In the past, the market for nickel sulfate was largely driven by the plating industry and non-Li-ion battery applications, such as NiMH and NiCd batteries, but year-over-year growth in these areas has stagnated. Since 2014, owing to the mass production of Li-ion batteries and the popularity of ternary cathode materials (composed of nickel, cobalt, manganese or aluminum) in portable electronics and EVs, the consumption of nickel sulfate has markedly increased as requirements for Li-ion batteries have grown.
Over the next decade, Roskill forecasts an explosive growth rate for the consumption of nickel in batteries (mostly in the form of nickel sulfate). Such demand growth will be supported not only by the uptake of EVs and by their growing energy capacity, but also by the greater use of nickel-rich cathode materials to improve the energy density of EV batteries. As a result, Roskill believes battery applications may have the potential to be the second-largest application of nickel after stainless steel by 2029.
However, the report cautions, the road will be a bumpy one. Primary nickel demand from the battery sector grew more slowly in 2019 than in 2018, due mainly to lower EV sales growth following the Chinese government’s reduction of EV subsidies. The long-term outlook for nickel demand in batteries remains strong, but over the shorter term, more sluggish EV demand growth and a slower-than-expected adoption of NCM811 technologies will keep consumption growth rates in check.
To meet the forecasted demand levels, a significant volume of new nickel sulfate units will need to be produced from primary nickel feedstock sources such as intermediates and Class I nickel, as well as recycling various residues and scrap materials.
Recent policy changes in the EV space, compounded with the emerging uncertainty in global macroeconomy under the COVID-19 pandemic may bring more volatility to the nickel sulfate market, Roskill said.