Bank Of America: The Global Nickel Market Could Face Supply Shortages And Demand Destruction

The global nickel market, roiled by a historic short squeeze and the russia-Ukraine war, could face a shortage of battery-grade nickel and damage to demand, bank of America analyst Michael Widmer and others said on April 4.

After years of oversupply, the nickel market has tightened significantly due to a mismatch in supply and demand growth, mainly secondary non-refined nickel for stainless steel, versus primary refined nickel for battery grade.

"Troubling conditions" in the nickel market mean suppliers need to pay more attention to battery-grade nickel production, while demand disruptions will affect electric vehicle manufacturers and stainless steel plants. Potential demand disruptions for battery-grade nickel could come from evolving battery technology; Global electric car makers may want to switch to cheaper lithium iron phosphate batteries, especially in compact cars because they are cheaper to produce.