There were two primary drivers of the price shifts earlier this year, according to a former EVP from Vale. The first was Chinese steelmaker Tsingshan’s announcement of converting pig nickel capacity into nickel matte. “That had an immediate impact on the market, as the analysts tried to digest what that actually meant for supply and demand,” explained the specialist. The company had agreed to provide 100,000 tonnes of nickel matte to two battery producers, which has knock-on effects for the supply used to make stainless steel.
The second influence was “news around the re-emergence of LFP, lithium iron phosphate, that is used as the battery chemistry for EVs, and this would be in direct competition with the nickel-bearing chemicals such as NCM [nickel, cobalt, manganese].” In fact, this specialist designates LFP a risk in the immediate term. “There have been some developments around pushing up the energy density via technology, primarily around how the cells are packaged.” Consequently, they noted, LFP has become viable for the automotive industry, specifically entry level vehicles.
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