A new cycle of nickel consumption begins

With the rapid growth of sales of new energy vehicles in the past two years, high nickel is an important direction of the development of power batteries in the future. the demand for nickel for power batteries of electric vehicles may enter an explosive period and become the largest new point of demand for nickel.

On January 22, 2022, Tesla announced the signing of a supply contract for 75000 tons of nickel ore, another major order after he signed a procurement contract with Western Nickel in July last year and Poloni Resources in October last year. Ningde era, BYD and other enterprises have also recently reported the purchase of nickel ore news. After nickel gets into the electric car, the competition for nickel resources is fierce, and the new consumption cycle opens.

A shortage contradiction intensifies to promote the upper tuyere of nickel resource station

Since 2022, the global nickel inventory is low, the inventory elimination speed is considerable, and the fluctuation of the nickel market has intensified. The basic logic behind this is that the contradiction between the exuberant demand for nickel and the structural shortage of nickel resources is deepening day by day in the rapid development of new energy vehicles in the world. After the car companies represented by Tesla set their sights on the new energy track, they laid out in advance one after another, and the battle for nickel mines became more and more fierce.

The scramble for nickel resources by car companies is still attributed to the uneven distribution of nickel resources in the world. According to USGS data, the global nickel reserves reached 94 million tons in 2020, mainly distributed in Indonesia (21 million tons, accounting for 22.34%), Australia (20 million tons, 21.28%) and Brazil (16 million tons, 17.02%). These three countries have the advantage of natural nickel resources. In terms of nickel production, global nickel production reached 2.7 million tons in 2021, an increase of 8 per cent over the same period last year. Of these, Indonesia, Russia, New Caledonia and Australia produced 370000 tons, 250000 tons, 190000 tons and 160000 tons of nickel respectively.

"View the SMM nickel industry chain database

In 2021, China's nickel consumption in the battery industry alone will reach 145000 tons, and this figure may exceed 600000 tons in 2025. However, China's nickel reserves account for only 3% of the world's total reserves, and the annual mining capacity is only 120000 tons. Therefore, nickel resources are highly dependent on foreign resources. the shortage of resources has become a "choke" problem.

Based on the production of BHP Billiton, Vale, Glencore, Norilsk and Sumitomo, the world's five largest nickel producers, output in 2021 was 533700 tonnes, down 10.83 per cent from a year earlier. However, with the rapid development of new energy vehicles in the world in 2021, the shortage of nickel resources intensified, and nickel in Shanghai increased by more than 35% for the whole year.

B car companies aim at the new track and lay out nickel resources ahead of time

In terms of global primary nickel consumption structure, stainless steel and new energy vehicles account for 71% and 12% of nickel consumption in 2021, respectively, and are expected to reach 64% and 18% respectively in 2025. It can be said that stainless steel is the main consumer of nickel, while new energy vehicles are the largest increment of nickel consumption.

In terms of subsidies for new energy policies, the US policy has increased, while the Central European policy has declined steadily. In 2021, the penetration rate of new energy vehicles in the United States is only 3.6%, and it is dominated by pure electric vehicles. On August 5, 2021, US President Joe Biden signed an executive order requiring an electrification rate of 50% by 2030. On November 19, 2021, the U.S. House of Representatives approved a $1.75 trillion spending plan, of which $320 billion will be used for clean energy and electric car tax credits, with a maximum bicycle tax credit of $12500.

The market demand for new energy vehicles in Europe is in the explosive stage, and the government has introduced subsidy policies to stimulate sales, but some national subsidy policies have also begun to withdraw smoothly. For example, the UK proposed a "new car scrapping scheme" to encourage drivers to replace fuel vehicles with electric vehicles and consider subsidizing drivers up to 6000 pounds, but in March 2021, the UK lowered the subsidy threshold for electric car purchases and lowered the subsidy standard. China's policy orientation has been weakened, subsidies have fallen back, and the market has been driven. Compared with the subsidy program in 2021, the subsidy standard will decline by 30% in 2022, and the subsidy policy for the purchase of new energy vehicles will end by the end of 2022. In 2021, when the sales and penetration of new energy passenger vehicles in China are significantly higher than expected, the subsidy policy still maintains the original decline, reflecting the policy's determination to promote the development of new energy vehicles. Whether it is the increase of subsidies in the United States or the smooth withdrawal of subsidies in China and Europe, all countries are committed to guiding the healthy development of the new energy vehicle industry, advocating clean energy consumption and seizing the new energy race track.

C new energy vehicle battery is the largest increment of nickel consumption

Under the background of the rapid development of new energy vehicles, the reason why car companies prefer nickel is that nickel can greatly increase the energy density of power batteries, improve the mileage of electric vehicles, and is cheaper than cobalt resources. Moreover, the introduction of 4680 battery further opens the application space of ternary high nickel battery in the field of lithium battery, while the "laterite nickel-high ice nickel" technology will alleviate the scarcity of pure nickel and reduce the production cost of power battery. Nickel for power battery "has a bright future".

At present, the power batteries of new energy vehicles are mainly divided into ternary batteries and lithium iron phosphate batteries (LFP), which have been fighting for a long time. The former has low cost and high safety, but the endurance ability is slightly poor, while the latter has high endurance ability, but the cost is also relatively high.

Lithium iron phosphate battery is favored by automobile companies, in addition to its advantages in safety and cost, but also lies in the technological breakthrough of lithium iron phosphate enterprises. In April 2021, BYD announced that all-electric passenger models would be equipped with lithium iron phosphate blade batteries. The battery cell is in the shape of a "blade", which has increased its space utilization by 50%, and will be able to meet the mileage requirement of 400 mi 600 km in the future. In October 2021, Tesla announced that the worldwide standard continued version of Model-3 and Model-Y will all be converted to lithium iron phosphate batteries. In addition, Volkswagen, Ford and Mercedes-Benz have all made it clear that lithium iron phosphate batteries will be used in entry-level models.

In the future, with the gradual decline of the policy subsidy of high-nickel ternary material power battery, the economic advantage of lithium iron phosphate battery will be more obvious. However, due to the difference in energy density, lithium iron phosphate battery and ternary lithium battery will be widely used in low-end vehicles and high-end vehicles respectively.

The common ternary cathode materials are composed of nickel, cobalt and manganese, and the types are NCM333, NCM523, NCM622 and NCM811. Among them, the main role of nickel is to increase the energy density and prolong the mileage; the main role of cobalt is to act as a positive bracket to strengthen the structure; and the role of manganese and aluminum is to improve thermal conductivity. Numbers such as 333 and 811 refer to the molar ratio of Ni/Co/Mn in NCM materials. Because cobalt metal is scarce and expensive, while nickel metal is relatively low and can increase the energy density of batteries, ternary cathode materials are developing towards high nickel and cobalt-free, and NCM622, NCM811 and NCA (nickel cobalt aluminum) batteries will gradually become the mainstream.

In September 2020, Tesla publicly launched the 4680 battery for the first time on Battery Day, using ultra-high nickel NCA, nickel 90 and so on. Tesla is expected to start mass production in 2022, which will further enhance the high nickel ternary market space. Among them, the number 46 refers to the diameter of the battery 46mm and the height of the battery to 80cm. Compared with the previous 21700 battery, the capacity of the battery is increased by five times, the mileage is increased by 16%, the battery power is increased by six times, and the energy density is as high as 300Wh/kg. 4680 batteries with fewer cells can reduce the difficulty of battery thermal management, compress costs and improve efficiency. In addition, 4680 removes the main heating components of the battery by using laser electrodeless ear technology, which reduces the internal resistance of the battery and improves the thermal stability of the battery.

Tesla announced that 4680 production capacity will reach 200GWh by the end of 2022 and 3TWh by 2030. Subsequently, a number of enterprises followed, such as Panasonic announced plans to start trial production of 4068 batteries in Japan in March 2022; LG has begun to build a trial production line of 4680 batteries, which is planned to achieve mass production as early as 2023 to supply Tesla; and BMW 4695 three-yuan cylinder is expected to open bid 100-120GWh with a cycle of seven years and mass production from 2024.

D high nickel matte is expected to reduce the cost of nickel for power batteries.

Battery-grade nickel sulfate is mainly used to prepare ternary precursors, and the cathode material formed by the sintering of ternary precursors and lithium salts is an important part of lithium batteries, so the preparation of nickel sulfate is an important part of battery preparation. The main processes for the preparation of nickel sulfate are: wet smelting intermediate-nickel sulfate; ternary waste-nickel sulfate; nickel bean / powder-nickel sulfate. These three processes for the production of nickel sulfate or raw materials are scarce or costly. Qingshan technology opens up the pyrometallurgical production line of "nickel laterite-high nickel matte-nickel sulfate". The core of the process is that after melting high nickel iron by RKEF, stainless steel is not further produced, but high nickel matte is prepared by converter vulcanization. Then, downstream products such as nickel sulfate can be produced from high matte. The raw material used in this method is ferronickel, which is relatively cheap and easy to obtain, which alleviates the structural shortage of battery raw materials.

After the production line is opened, several major products in the nickel industry chain are connected, including ferronickel, nickel sulfate, electrolytic nickel and stainless steel. There is a competition for resources between high nickel matte and stainless steel, which is expected to convert excess nickel iron production capacity into high nickel matte, and then produce nickel sulfate. to alleviate the current high dependence of nickel sulfate on imported nickel intermediates and the gap of nickel sulfate due to the rapid development of new energy vehicles. The core factor of large-scale mass production of high nickel matte is that the price difference between nickel sulfate and nickel iron can cover the conversion cost (about 33000 yuan / nickel ton according to SMM), and the hidden factor is excessive demand for nickel sulfate or oversupply of nickel iron.

With the rapid growth of the installed capacity of power batteries and the increasing share of ternary high-nickel batteries, the nickel consumption of power batteries in 2020 is about 160000 tons, accounting for about 6.5% of the global nickel consumption. It is estimated that the nickel consumption of power batteries will reach 760000 tons in 2025 and 1.66 million tons in 2030, accounting for more than 20% and 30% of global nickel consumption, respectively. The average annual growth rate of nickel for power batteries reached 36.56% in 5 years and 26.36% in 10 years.

When nickel gets into an electric car, new energy starts a new cycle of nickel consumption. Under the background of uneven distribution of global nickel resources, the major car companies around the world aim at the new energy vehicle track and lay out nickel resources in advance. Looking to the future, we believe that the technological revolution represented by high matte will reduce the production cost of power batteries and promote the steady development of the new energy industry.

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