CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Nickel prices have lagged the base metal complex this year as China’s clampdown on emissions from heavy industry crimps the stainless steel market, which is still responsible for the bulk of demand.
Less than 10% of nickel ends up in the battery supply chain, but growing demand for EVs is set to transform the nickel market, doubling its current size through 2040.
While ruling prices for most base metals incentivize the building of new mines at these levels, a new research note by Wood Mackenzie points to the inelastic nature of supply due to long lead times for new mines of over a decade, and a dearth of advanced projects.
This is especially true of nickel, says the Edinburgh-based research company, with projects deemed probable to be greenlit not enough to even cover one year’s supply requirement over this decade.
And this shortfall is based on Woodmac’s base case scenario for demand, not taking into account any additional requirements for battery metals, should the world embark on an accelerated energy transition as envisaged under COP26.
