Nickel is a silvery-white ductile metal mainly used in the production of ferronickel in stainless-steel development as well as other alloys. Thanks to its use in rechargeable nickel-metal hydride batteries and nickel-cadmium batteries, nickel is among a group of metals poised to enjoy massive demand due to the green-energy transition.
These metals are expected to run into supply issues in only a few years as suppliers will likely struggle to ramp up production to meet the rising global demand. The need for high-grade nickel, coupled with a lack of active nickel mines and supply chain issues caused by geopolitical events, is already leading to nickel shortages in worldwide markets.
With applications in high-grade alloy manufacturing and EV battery development driving demand for nickel, the metal is at a decisive point between demand and supply. The development of high-grade alloys has been the primary driver for nickel demand in recent years, but increasing electric-vehicle adoption is sure to make demand for the white metal surge to record highs over the next decade.
Experts predict the global nickel market will grow from $33.31 billion in 2020 to $59.14 billion by 2028 at a compound annual growth rate (CAGR) of 7.3%. Nickel exhibited this projected growth rate in 2021 when rebounding demand for the metal caused prices to surge to more than $20,000 per ton.
Past behavior coupled with projections of increasing electric-vehicle adoption, particularly by fleets, and some manufacturers preferring nickel-chemistry batteries were the primary drivers for nickel’s projected growth. Although lithium-ion batteries have been the standard since the EV industry’s inception, nickel-cobalt-manganese (NCM) batteries are gaining popularity because they offer more energy density and faster chargeability despite being more compact.
Now that the recent nickel squeeze seems to have subsided and the market is poised to see an influx of EV battery-grade nickel, Macquarie Group lead strategists say the nickel market is at a critical juncture. The influx of nickel at global stock exchanges such as the London Metal Exchange (LME), which sets the benchmark for global nickel prices, may cause the metal’s prices to inverse and even reduce demand if nickel production rises and meets expectations.
Macquarie believes the launch of new nickel-production facilities in Indonesia and China could be the tipping point that changes the current situation by increasing nickel supplies at the LME by 35% compared to 2022 levels.
Other producers of critical metals, such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF), are also working to fortify the supply chains of minerals such as graphite so that the green-energy revolution can proceed unencumbered by shortages of the needed minerals.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
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