Japanese Chemical Trader blog

Japan Chemical Trading Blog

Nickel Shortage, 12 Thousand Tons in 2015

According to the Japan Metal Bulletin on January 30, 2015, Sumitomo Metal Mining revised its worldwide nickel supply and demand prediction for the calendar year 2015 to be a supply shortage of 12 thousand tons, reducing the shortage from the previous prediction of 32 thousand tons.

Nickel is a rare metal used for stainless steel, plating, batteries and catalysts, and is produced mainly in Australia, Russia, Canada, Indonesia and the Philippines.
Recently, the Ambatovy Nickel project in Madagascar, jointly run by Canada, Korea and Japan, is nearing full production (60 thousand tons a year) and will contribute to an increase in the global production amount.
Other new projects such as in New Caledonia (Goro Nickel, 60 thousand tons a year), Brazil (Onca Puma, 50 thousand tons a year) and the Philippines (Taganito, 30 thousand a year) have also increased production.
As for demand, China tops the list as the main consuming country (a thousand tons a year), followed by the U.S., Japan, Germany and Korea.

Recently, nickel demand has been globally increasing, especially in China, primarily for stainless steel and special alloys.
Panasonic announced that its lithium-ion battery to be sold for the “Model S” electric car of Tesla Motors of the U.S., which has a longer cruising distance than previous electric cars (500 kilometers when fully charged), uses nickel as a positive-electrode material.
Sumitomo Metal Mining, as the provider of its material, Lithium Nickelate, is investing 15 billion yen in its production facilities, increasing output from 850 tons to 1,850 tons to cope with this demand expansion.
New facilities are scheduled to be completed in December 2015. (Sumitomo Metal Mining supply Lithium Nickelate to Panasonic and Panasonic supply lithium-ion battery to Tesla Motors.)

With these actions, even though the above new projects are operating successfully and also China has increased production, a nickel shortage is anticipated in 2015, a reversal from a projected surplus in 2014.
The projected supply in 2015 is 1,990 thousand tons against 1,961 thousand tons in the 2014 projection.
Projected demand in 2015 is 2,002 thousand tons against 1,925 thousand tons in the 2014 projection.
Therefore, some say that the prices will about-turn and rise when the Chinese ore inventory runs out; however, the actual prices keep falling and the nickel inventory of the London Metal Exchange (LME) is continuing at a record high level of over 420 thousand tons.
We sell nickel compounds made in Japan, including nickel acetate, nickel carbonate, nickel chloride, nickel hydroxide, nickel nitrate, nickel sulfamate and nickel sulfate to our customers all over the world, and we have a steady stream of inquiries from overseas, helped by a weaker Japanese yen.

The prices of natural resources have fallen sharply, with crude oil at the top of the list; nevertheless, I don’t predict that the value of infinite resources will drop over the mid and long term as long as the world’s population keeps increasing, people keep aspiring for a high-quality life and technological innovation continues.