SHANGHAI, May 31 (SMM) - At the SMM 2023 Indonesia Nickel and Cobalt Industry Chain Conference, Jim Lennon, senior commodity consultant at Macquarie Group, made a detailed analysis of Indonesia's role in meeting the soaring demand for nickel.

Jim Lennon said that global nickel supply growth has been strong in recent years, contributed by Indonesia. Nickel is currently a value-added product that contributes significantly to Indonesia's export earnings. Indonesia's planned total nickel production capacity currently exceeds 5 million mt/year, compared with global nickel production of 3.1 million mt in 2022. After losing 100,000 mt of nickel production in 2021 due to the pandemic and other factors, Indonesia began to increase production capacity to catch up. From 2022 to 2029, Indonesia's nickel production will account for more than 75% of the global supply.

Demand for nickel in batteries is expected to grow strongly through 2030. The future race for high-nickel batteries means that demand growth for nickel is likely to outpace that for lithium, with cobalt lagging behind.

Total global EV demand for primary mines will peak in mid-2030 as secondary mines emerge - thus concerns of depleting reserves are less of a concern.

The supply of Indonesian nickel will no longer be an issue, but the type of supply and restrictions will become the main issue. Strong Indonesian supply and slowing demand caused global nickel supply to record a surplus ofr the first time in 2022. What was in surplus was not (LME deliverable) nickel metal, but rather NPI and ferronickel. Prices of LME and SHFE nickel saw an unprecedented premium over NPI and ferronickel. Considering the underutilization of nickel production capacity in Indonesia, the market may continue to be in surplus in the next five years.

Stainless steel dominates the use of nickel, and batteries are the second-largest use of nickel and nickel demand from batteries is growing rapidly. In 2022-2023, nickel use in battery and stainless steel declined due to the use of NPI and intermediate products, leading to a surplus of nickel.

Global markets are increasingly concerned about dependence on Indonesian nickel supply from a state dependence (including Chinese control) and ESG perspective. Indonesia now needs to carefully manage the next phase of nickel supply growth against a backdrop of growing concerns over the “localization” of battery supply chains in North America and Europe. Significant regional price variations for nickel battery raw materials (mainly sulphates) are increasingly likely, with potential premiums for non-Indonesian/Chinese materials also increasing.

For more about this conference, please click: 2023 INDONESIA NICKEL AND COBALT INDUSTRY CHAIN CONFERENCE

Related News: Key Takeaway from SMM 2023 Indonesia Nickel and Cobalt Industry Chain Conference: Indonesia Plans to Launch Nickel Price Index This Year and Defer Export Tariffs on Nickel Products

Key Takeaway from SMM 2023 Indonesia Nickel and Cobalt Industry Chain Conference: INSG Shares Insights on 2023 Global Nickel Market Outlook and Sees Supply Surplus

More popular news

India Looking to Make Way for EVs by Shaking Electric Wheelers’ Dominance via Massive Subsidy Cuts, How Will This Affect Chinese Exporters and Upstream LMO？

Vale Plans To Expand Iron Ore Capacity Aggressively

Key Takeaway from SMM 2023 Indonesia Nickel and Cobalt Industry Chain Conference: Indonesia Plans to Launch Nickel Price Index This Year and Defer Export Tariffs on Nickel Products

Key Takeaway from SMM 2023 Indonesia Nickel and Cobalt Industry Chain Conference: INSG Shares Insights on 2023 Global Nickel Market Outlook and Sees Supply Surplus

Goldman Sachs, Barclays warn: Fed will not cut interest rates this year

Balance of M2, M1 and M0 All Rise, China’s Central Bank Says

China April Lithium Carbonate Import Volumes And Prices Both Crashed From March, Despite A Surge From A Year Ago

SMM Comment: Oil Falls as Remarks by Russian Minister Contradicts Bullish Signal from Saudi Arabia, SHFE and LME Base Metals Outperform Ferrous Metals, Market Bets on US Rate Cut in September

It’s Urgent for China to Enhance Monetary Policy and Take Other Measures to Tackle Multiple Challenges Facing Economic Recovery, Chines Government-Led Economic Daily Says

Dollar, Oil, Gold, Base Metals, Ferrous Metals All Go Down, EIA Cuts Oil Price Forecast

India to become Europe’s top supplier of refined oil products after massive purchases of Russian oil

Goldman Sachs: China will be the only major economy with positive growth this year, bullish bets on new energy vehicles and biotechnology in the long run

CITI Research Lowers Price Forecast for Nickel, Aluminium and Zinc in 2023-2024 But Bets on Higher Copper Prices

Goldman Sachs Cuts Copper Price Forecast Amid Slowing Western Manufacturing, But Bank Of America Bets On Higher Copper Prices, Citing A Surge In Demand From China