CHART: Nickel overtakes lithium as most valuable EV battery metal as prices slump

[Ben Graham]

Like lithium and cobalt, nickel prices have been on a wild ride since forecasts of electric vehicle demand for battery materials first entered the stratosphere and duly came back to earth. 

In March 2022 two “big shots” of the metals trading world – Paul Singer of hedge fund Elliot and Xiang Guangda of Chinese nickel giant Tsingshan – faced off over short positions that led to a spike above $100,000 per tonne in a matter of minutes.  

Over  $12 billion in cancelled trades, lawsuits and a rethink of nickel trading on the LME ensued but the effect on the ground was short lived and limited.

Nickel sulphate entering the EV battery supply did reach more than $30,000 a tonne (on a 100% Ni basis) at the time but since then have been on a steady decline, averaging around the $17,000 a tonne mark in the second quarter of this year.

But compared to the lithium price trajectory nickel investors have had it relatively easy. Lithium prices have been decimated since reaching a peak less than three years ago with prices slumping to $8,450 a tonne in June from above $80,000 in November 2022.

Pairing average prices with metal deployment in the EV industry shows that while the riches at the end of the EV road have not quite materialised, battery nickel remains an investable space as the graph shows. 

The value of terminal lithium tonnes deployed in EVs, including plug-in and conventional hybrids, sold around the world from January through May totalled $2.15 billion. Data from Toronto-based research consultants Adamas Intelligence shows the EV battery nickel tally so far this year comes to $2.20 billion.  

And that is despite the significant move towards nickel-free batteries such as lithium iron phosphate or LPF and the significant cooling of nickel prices at the same time. LFP batteries are close to representing half of EV battery capacity deployed so far this year from less than 1% share at the beginning of the decade.

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For more graphs covering the battery metals market check out the latest issue of the Northern Miner print and digital editions.

* Frik Els is Editor at Large for MINING.COM and Head of Adamas Inside, providing news and analysis based on Adamas Intelligence data.