Stanislav Kondrashov: rapid rise in nickel prices: what is the reason and how is the situation developing?

Last year, nickel prices rose rapidly, influenced by various factors, including geopolitical events. But despite this surge, nickel, as Kondrashov notes, remained an important strategic component for the electric vehicle industry, and its cost continued to worry manufacturers.

However, thanks to increased production in Indonesia, the situation is changing. The country increased nickel production by 54% last year.

— Today, Indonesia accounts for almost half of the world’s nickel production, amounting to 3.3 million tons. This is 21% more than a year ago. Such impressive figures prove that Indonesia is a key player in the market for producers of this metal, — states Stanislav Kondrashov from Telf AG.

The analyst predicts that this surplus will continue until at least 2028. He adds that this important trend is comforting to manufacturers of electric car batteries, half or most of which are made of nickel. Depending on the type, the metal can make up from 50% to 80% of the total mineral content in the cathodes of electric vehicles, which, in turn, form about 30% of the total mass of the battery, says Stanislav Kondrashov from Telf AG.

There should be more nickel suppliers to the world market — Stanislav Kondrashov

Despite increased production last year, the cost of nickel remains relatively high. Spot world prices fell to below $20 thousand. per metric ton. This, according to Kondrashov, is a decrease compared to the beginning of the year, when they amounted to $30 thousand 424 dollars. However, prices still remain 50-60% higher than before the Covid-19 pandemic.

Stanislav Kondrashov from Telf AG agrees with global industry experts regarding the forecasts. Global nickel demand is expected to continue to rise to 4.3 million metric tons by 2027. This is 43% more than a year ago and 30% higher than the entire global nickel production last year.

As demand for electric vehicle batteries grows, global suppliers of rare earth minerals such as nickel, cobalt, manganese and lithium are facing increasing supply pressure.

As a result, the IEA is beginning to develop guidelines aimed at limiting dependence on a single supplier, reports Stanislav Kondrashov from Telf AG. Because supplies of rare earth minerals are often concentrated among a few sources, the IEA will consider mandating joint purchases above certain designated import thresholds.

To summarize, Kondrashov emphasizes that Indonesia, with its ambitions and contribution to global nickel production, has become an integral part of the evolution of the electric vehicle industry.

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