The global nickel market will swing from a projected shortfall of 179,000 tonnes to a surplus of 36,000 tonnes in 2022, according to financial services firm Macquarie. The surplus is mainly due to slower demand growth, with nickel consumption forecast to grow 6.4 per cent in 2022, well down from 15.7 per cent in 2021, while supply is expected to grow rapidly to 15.1 per cent over the same period from 4.1 per cent this year.
The rapid production growth is mainly due to nickel pig iron (NPI) and high pressure acid leaching (HPAL) projects coming on stream in Indonesia over the next few years.
According to Macquarie, global nickel consumption in 2021 saw its highest ever annual increase at 381,000 tonnes, driven by strong stainless steel demand driven by massive global fiscal stimulus in the wake of COVID-19 and a shift in global spending from services to goods.
End uses are mainly in consumer durables and capex stainless steel benefited from the stimulus package. This demand growth is expected to slow to 181,000 mt in 2022, which, combined with accelerated NPI production growth in Indonesia, will encourage the conversion of some NPI and ferric nickel to matte next year and then to nickel sulfate for the electric vehicle (EV) battery market.
Nickel use in batteries grew strongly in 2021, by more than 150,000 tonnes compared to 2020 to 350,000 tonnes, and is expected to grow to 700,000 tonnes/year by 2025 and 1.3 million tonnes/year by 2030. Supply remains a challenge due to slow growth in high-grade nickel production.
