As the Ukraine crisis exacerbated supply concerns and demand for nickel for electric vehicle batteries soared, nickel prices soared to their highest levels in more than 10 years.
Nickel-cobalt aluminum is an important chemical component behind the production of electric vehicle batteries. Nickel is one of the important metals in the cathode of lithium-ion batteries. Rapid growth in demand for electric vehicles has led to tight nickel supply, with nickel pushed to its highest level since 2011 on the London Metal Exchange (LME).
Driven by the demand for new energy vehicles, the proportion of nickel in the field of lithium batteries has continued to increase, which is about 3.5% in 2015, 16.1% in 2021, and is expected to rise to about 21.5% in 2022. According to the report data of the World Bureau of Metals Statistics, the supply shortage of the global nickel market will reach 144,300 tons in 2021.
In addition to its growing popularity in the field of electric vehicles, the Russian-Ukrainian conflict is also another thrust of the soaring nickel price. Russia is the world's third-largest producer of nickel, and if the situation deteriorates, global commodity flows will collapse. For most of the past two weeks, the Western media has been hyping up "war is imminent." On Sunday, Russian President Vladimir Putin held hours of talks with French President Emmanuel Macron to discuss a summit between Russia and Western countries to provide a diplomatic solution to the Crisis in Ukraine. However, the Russian government said there were no "concrete plans" for the summit at this time.
On the other hand, the sharp decline in nickel inventories is also one of the main reasons for supporting the strengthening of nickel prices. Industry insiders said that with the world's electric vehicle production is booming, metal nickel inventories are also continuing to decrease, the global nickel spot supply is showing rare signs of shortage for more than 10 years, a large number of downstream buyers have to pay a huge premium to get the spot.
Zhitong Finance APP learned that as of press time, the price of nickel in the LME period rose by 1.75% to $24,775 per ton, the highest level since August 2011. So far, the price of nickel in the 2022 LME period has risen by 18%.
In terms of seasonality, nickel prices were last at this level in February, during the commodity boom of the early 2000s.
Russia is a major producer of metals, and aluminum prices are soaring. Investors fear that supply chain disruptions or sanctions could hit the country's exports in the event of military action between Russia and Ukraine. Aluminum prices, on the other hand, are on the verge of breaking through new highs.
Another striking metal is lithium, whose soaring prices have little to do with Russia and have been largely affected by soaring demand for electric vehicles. It is worth reminding that the Bloomberg Industrial Metals Sub-Index continues to reach new highs.
What does this mean for eviction prices? It seems that Tesla will have more trouble making the affordable Model 3. Musk has said: "Making electric vehicles that users can afford has been our dream from the beginning of the company. ”