2023-12-12 01:10:02
A metal notably used in the production of electric batteries and in the manufacture of stainless steel, nickel is an essential element of the energy transition. But its price is at its lowest level for two years. Particularly at issue: a production surplus in Indonesia, the world’s leading producer.
At the end of November, nickel fell below $16,000 per metric ton at the London Metals Market. Never seen since April 2021. Like lithium, the price of nickel is in complete fog. The reason for this decline is, as is often the case, relatively simple: the supply has exploded in recent years, in particular thanks to the arrival on the market of Indonesia, which has become the world’s leading producer. Indonesian nickel, with low production costs, quickly became popular with Chinese consumers.
At the same time, forecasts from the International Energy Agency and the World Bank suggested that demand would be increasingly significant. It is increasing, of course, but not as quickly as supply. Result: prices fall.
Alternative technologies
There are even surpluses of nickel on the market. More than 150,000 tonnes over the first nine months of the year, compared to just over 60,000 last year during the same period. Especially since consumers have found a substitute technology, according to Didier Julienne, president of Commodities & Resources. Nickel, cobalt and manganese batteries are being replaced by iron phosphate batteries. Very abundant metals, easier to extract and less expensive.
The drop in nickel prices mainly affects miners whose production costs are high, such as in New Caledonia, the third largest producer in the world. The situation in the sector is alarming. Of the three pebble factories, none is profitable. Traveling in the archipelago last week, Bruno Le Maire, French Minister of the Economy, spoke of a need for financing “ total and immediate “. According to him, the total amount would amount to one and a half billion euros. This would be the condition sine qua non to save the sector.
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