Nickel Demand Forecast to Grow 4%, Boosted by Stainless Steel, Battery Sectors

SEATTLE (Scrap Monster): The 10-year Market Outlook Report published by London-based Roskill Information Services forecasts 4% per annum growth to global nickel demand during the period from 2017 to 2027. The projected demand growth is mainly on account of increased demand from battery sector and stainless steel producers.

According to the report, stainless steel sector accounted for approximately 70% of all primary nickel consumption in 2017. The demand for primary nickel is forecast to increase by 2.5% every year over the course of the period until 2027. The demand will be boosted by stainless steel mills in countries such as China and Indonesia which still rely on primary sources when compared to other countries that rely more on scrap sources.

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The nickel demand has witnessed a sudden surge, thanks to recent growth in battery sector, fueled by increasing number of automotive applications. As electric vehicles gain more popularity, the demand for nickel is set to surge, as the best available option to store the energy required by electric motors is the lithium-ion battery, which contains nickel. The Roskill report forecasts the primary nickel demand from the battery sector to post a per annum growth of nearly 20%.

The nickel supply growth will be mainly driven by Indonesia and China. These two countries together will account for nearly 60% of the total production growth in the next decade. The primary nickel output by Indonesia has increased multifold from 24 kt in 2014 to over 170 kt in 2017. By 2027, the country’s refined nickel production is expected to surpass the levels of 550 kt.

As per market data, nickel market reported its second consecutive year of deficit in 2017, with demand exceeding supply. The series of new investments in Indonesia is likely to boost the refined supply. As a result, the markets are likely to transform from small deficits to modest surpluses over the forecast period.