Nickel's Purpose: A Look at Its Uses
Nickel, a versatile metal alloy, is set to play a significant role in the clean energy transition, particularly in the electric vehicle (EV) market. This transition is driven by the increasing demand for nickel in the production of lithium-ion batteries, the preferred choice for EVs due to their high energy density and longer range.
Approximately 35% nickel and 65% iron, ferronickel is key to the production of stainless steel. However, its significance extends beyond this, as nickel is the main element used in nickel-manganese-cobalt (NMC) cathodes, considered the most important lithium-ion battery ingredient due to its ability to improve power and endurance.
The projected demand for nickel in the EV market is set to increase substantially in the coming years. By 2035, the demand for battery-grade nickel is expected to rise by an additional 1.4 million metric tons, representing a 12.8% increase from current levels. By 2040, in a favorable climate policy scenario, global nickel demand for clean technologies, primarily from EV batteries, is projected to more than sevenfold increase to about 3.4 million metric tons, making EV batteries the largest nickel-consuming segment worldwide.
As of 2022, nickel demand for EV batteries accounts for about 10% of the total demand. However, this figure is rapidly growing as EV sales are expected to exceed 30 million pure battery electric vehicles in the next decade, with an additional 11.5 million plug-in hybrids.
Despite this surge in demand, the nickel market is currently in a state of structural oversupply. This oversupply may balance out around 2027-2028 before the rapid growth phase fully hits. Supply challenges include geopolitical risks, concentration of nickel production mainly from Indonesia and the Philippines, and environmental and infrastructure barriers in other resource-rich countries.
The global nickel market is projected to grow at a compound annual growth rate of 7.3 percent until 2028, reaching a size of US$59.14 billion. The majority of primary nickel demand is for stainless steel production, accounting for nearly three-quarters. Nickel is also used in the creation of non-ferrous alloys for coatings, kitchenware, power generation, jewelry, and mobile phones.
Major nickel producer Vale predicts that global usage for nickel will hit 6.2 million metric tons by 2030, an increase of 44 percent compared to 2022. Nickel-based alloys, including superalloys, corrosion resistant alloys, wear-resistant alloys, precision alloys, shape memory alloys, and hydrogen storing alloys, are often used in industries such as electronics, energy, aviation, and shipbuilding.
Attention has been drawn to the potential for nickel to replace cobalt in lithium-ion batteries due to its lower cost. Nickel sulfate is a key component in NMC batteries, and in recent years, the amount of nickel in NMC batteries has risen to reach 6-2-2 in some batteries, with companies even eyeing the possibility of an 8-1-1 composition.
In conclusion, demand for nickel in the EV market is projected to increase by millions of metric tons over the next two decades, driven by accelerating EV adoption and stricter climate policies requiring more battery-grade nickel for lithium-ion batteries. This will likely position nickel as a critical material for the clean energy transition.
[1] International Nickel Study Group (INSG) - [2] Nickel Institute - [3] International Energy Agency (IEA) - [4] Mining.com - [5] Reuters News Agency
- The renewable-energy industry, particularly the electric vehicle sector, is expected to drive the demand for nickel due to its importance in the production of lithium-ion batteries.
- Data-and-cloud-computing technology and finance sectors play a role in the projected growth of the nickel market, as they help in predicting and facilitating the increased demand for battery-grade nickel.
- The increasing demand for nickel in the renewable-energy industry is leading to advancements in the technology sector, with research focusing on replacing cobalt with nickel in lithium-ion batteries for improved power and endurance.
