Nickel: The “Devil’s Metal” Rising in the Green Age
Nickel might remind you of a shiny five-cent coin, but there's more to it than meets the eye. With the increasing demand from low-carbon technologies, this metal is dancing with the devil, both in its uses and its volatile price.
Nickel’s Resume:
Mostly found giving stainless steel its oomph (about 70% of world demand), nickel's now stealing the limelight in electric vehicle batteries. As we drive towards a green future, this role is set to explode, moving from 11% of demand to a predicted 61% by 2040.
Two Sides of Nickel:
Nickel isn't just… well, nickel. We've got:
- Class 1 Nickel: This is the primo stuff, coming from sulphide deposits. It's pure and perfect for battery cathodes, but it's also pricey to produce.
- Class 2 Nickel: This is the 'everyday' nickel from laterite deposits. Less pure, but hey, it's great for the stainless steel industry.
The Devil’s Dance:
Why the devilish nickname? Nickel's dual uses play havoc in financial markets. The two big players – Indonesia and the Philippines – controlling the production add to the drama. For instance, Indonesia’s export ban on unprocessed nickel in 2020 nearly tripled the price per tonne within a couple of years. Talk about turbulence!
Supply Chain Woes:
Nickel's unpredictable market isn’t exactly a green flag for investors, especially when Class 1 nickel, essential for batteries, is in the spotlight. Europe, for instance, is biting its nails. The EU's been warned of potential nickel shortages for battery production by 2030. And with the Ukraine crisis, Europe's reliance on Russian mining biggie, Nornickel, isn't comforting.
Hope in New Horizons:
Enter New Caledonia, the 4th largest producer in the world. Their "green nickel," championed by Prony Resources, boasts eco-friendly credentials, impressing even Tesla. However, challenges remain, as a recent report pointed to the high price volatility and soaring energy costs threatening the sector's sustainability.
Bottom Line:
Nickel, in its shimmering allure, sits at the crossroads of old-world utilities and the green energy revolution. Yet, navigating its tumultuous markets demands a dance with the devil, where the steps are as unpredictable as they are crucial.
