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The Chinese have collapsed nickel prices. Batteries will get cheaper?
06.03.2021 [14:14],
Gennady Detinich

Recently, the Chinese metallurgical giant Tsingshan Holding Group Co announced plans to begin mass shipments of nickel to local battery manufacturers. This news in two days plummeted world nickel prices by 20%. Prior to this, nickel prices had been steadily growing for about a year amid fears of a shortage of this metal, which is key for the production of lithium batteries.

Nickel prices fell to ten-year lows in two days

About two weeks ago, Tesla CEO Elon Musk tweeted that the expected nickel shortage will be the main obstacle to the development of electric vehicles. Interestingly, nickel began to be used in the electrodes of lithium batteries to reduce the use of cadmium, which is even more scarce and also more harmful to the environment. According to Musk, the danger of a shortage of raw materials for the production of batteries remained, which caused a further rise in nickel prices.

The Chinese ruined everything. Tsingshan Holding Group announced that it has developed a new technology for producing nickel matte, an intermediate product from which battery manufacturers obtain a pure chemical to produce electrodes. The new technology allows steelmakers to easily change their smelting process and quickly switch from nickel iron casting to nickel matte casting and vice versa. In fact, nickel-containing raw materials suitable for the production of battery electrodes can now be produced by any steel enterprise. This promises to «mitigate» the danger of nickel shortages.

Additionally, Tsingshan Holding Group plans to increase investments in nickel mining in Indonesia, which Elon Musk did not manage. Earlier, the Indonesian authorities were not satisfied with Musk’s proposal to create a Tesla battery factory on the islands, but it seems that a common language was found with the Chinese company.

The Tsingshan Holding Group plans to start deliveries of nickel matte produced using the new technology from October this year. These plans, at a minimum, will limit further growth in prices for this raw material, and, ideally, will help to reduce prices for it, which will entail a decrease in battery prices.

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