How To Play The Upcoming Nickel Boom, According To Expert
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(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.