Make Kitco Your Homepage

How To Play The Upcoming Nickel Boom, According To Expert

Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

(Kitco News) - In the next five to ten years, the electric vehicle (EV) revolution will likely dominate the nickel space and will be sending prices much higher, this according to Alex Laugharne, principal consultant of CRU Group.

Laugharne said that nickel sulfide producers and the metallurgical laterite producers, who are most closely linked to EVs, are undergoing technological changes that may leave a supply gap in the nickel market.

“I think you’re seeing a lot of people being hesitant to invest in new supply in the space because of this potential latent capacity. If they do encounter technical difficulties, may fail to materialize, and in that scenario, we may end up with a real crunch that could cause nickel prices, and in particular, nickel sulfide prices, or pure nickel prices to go through the roof,” he told Kitco News on the sidelines of the Mines and Money New York conference.

Laugharne added that although electric vehicles represent only a small part of nickel consumption, it is by far the fastest growing demand segment.

On the supply front, Laugharne said that China is still the largest supplier of battery-related metals, controlling about 85% of the world’s lithium-ion battery manufacturing.

“What you’re seeing the Chinese government do is they’re adjusting their subsidies to disincentivize the production of cheaper, lower range, shorter range EVs and push them towards higher end vehicles that would compete more directly with Teslas, Nissan Leafs, that sort of thing,” he said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.