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extract - Cobalt to share EV battery duties with nickel

 

Not all nickel is created equal

 

There are two types of nickel, Class 1 and Class 2. Class 2 nickel is primarily used to make stainless steel, which accounts for two-thirds of global nickel demand. Lower-cost, lower-grade laterite ores feed the stainless steelindustry.

 

Sulfide deposits provide ore for Class 1 nickel users which includes battery manufacturers. These battery-cos purchase the nickel product known as nickel sulfate, derived from high-grade nickel sulfide deposits. Itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s important to note that less then half of the worldâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s nickel is suitable for the biggest growth market - EV batteries - detailed further in the next section.

 

Previously in China, the nickel ore supply was insufficient to support demand from its stainless steel industry, so the Chinese began direct shipping nickel laterite ore from the Philippines, Indonesia and New Caledonia into the country to produce a low-nickel, high-iron product called nickel pig iron or âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“NPIâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ. NPI is used as a feedstock for stainless steel mills in China.

 

NPI is created by mixing saprolite ores with coking coal and a mixture of fluxes. The materials are put into an electric arc or blast furnace, which liberates the desired products from the slag, allowing the molten mixture to be cast into molds which form nickel pig iron.

 

However, NPI is unsuitable for use in battery cathodes, and the process to convert NPI to battery-grade nickel is costly. To make nickel sulfate requires a nickel content of 99%, NPI only has 8-12% nickel.

 

Switching from lower-grade nickel ore to higher grade, Class 1 nickel requires a mining company to make a large investment in refining and processing facilities.

 

Among the few to do so is BHP, which in 2017 revealed a US$43 million plan to upgrade its Kiwana refinery - part of its Nickel West operations - to produce 100,000 tonnes per annum of nickel sulfate. A second stage would double that to 200,000 tpa. Production at the new, upgraded plant started in June.

 

Chinese metals giant Tsingshan Holding Group announced last October it is building an Indonesian plant to produce nickel-cobalt salts from laterites. Using previously uneconomic technology Tsingshan says it will transform class 2 laterite deposits into class 1 metal for the battery market. Tsingshan is known for causing a major disruption to the nickel market in the mid-2000s, when it and other Chinese companies massively adopted nickel pig iron, crushing the nickel price. The firm went on to build low-cost NPI plants in Indonesia.

 

The $700 million project it is proposing in Indonesia would cost under a quarter the cost of recent HPAL projects, according to consultancy CRU Group, via Bloomberg.

 

https://www.aheadoftheherd.com/Newsletter/2...with-nickel.htm

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Indonesia to ban nickel ore exports earlier than planned

JAKARTA - Indonesia will ban exports of nickel ore, the raw material used in stainless steel and batteries, at the end of December, two years earlier than planned.

 

The aim is for the country, the top global source of nickel ore, to book higher export revenue by shipping value-added intermediate products overseas.

 

The decision means local miners have to soon start processing the raw metal domestically before shipping overseas. This is expected to help Indonesia tackle a widening current account deficit - the Southeast Asia's largest economy imports more goods and services than it exports - amid a global economic slowdown.

read more - https://www.straitstimes.com/asia/se-asia/i...er-than-planned

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The spike in the London benchmark three-month price to $18,470 a tonne came with a cloud hanging over supplies out of Indonesia and the future of the Chinese-owned Ramu nickel plant in Papua New Guinea after a big waste spill.

 

ASX-listed nickel stocks rose sharply on Monday, with Western Areas Limited up more than 15 per cent to $2.86, Independence Group up almost 9 per cent to $5.92, Poseidon up 13 per cent to 4.3Ãâہ¡ÃƒÆ’‚¢ and junior explorer St George Mining up almost 18 per cent to 16.5Ãâہ¡ÃƒÆ’‚¢ after announcing a new nickel sulphide discovery at its flagship Mt Alexander project.

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Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Tsingshan helped drive record drop in nickel inventories

Bloomberg News | October 8, 2019

extract

Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Tsingshan Holding Group Co. was one of the main forces behind a record drawdown in London Metal Exchange nickel inventories last week, according to people familiar with the matter.

 

The company, the worldâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s biggest stainless steelmaker, bought the nickel to secure supplies ahead of a looming ban on raw nickel ore exports from Indonesia, said the people, who asked not to be identified because the deals are private.

 

While the LMEâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s warehouse network is designed as a last-resort source for exactly this type of supply crisis, the scale of buying could raise concerns about a potential shortfall if the drawdowns continue. Some traders and consumers have been scrambling to pick up metal since early September, when Indonesia confirmed plans to bring forward its ban. But the move last week was surprisingly sharp âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ the nearly 25,000 tons that left the warehouses was the biggest decline in the four-decade history of the nickel contract.

read more - https://www.mining.com/web/chinas-tsingshan...el-inventories/

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Nickel mining was in the doldrums for years but it rebounded in early September, to a five-year high above $US18,000 per metric ton. Its value has jumped by 69 per cent since the start of the year, when it was trading at $10,604.

 

"At the moment, about 3 per cent of global nickel goes into electric vehicle batteries," said James Stewart, Ausbil Global Resources Fund's portfolio manager. "We expect that to increase to 10 per cent of the nickel market by 2022 and double again to 2025." "Nickel is a very important commodity to EVs [electric vehicles] and the battery thematic."

 

Eighty percent of the world's nickel is used to make stainless steel for pipes and household items like fridges. But electric battery makers are increasing the use of the metal ...... l

https://mobile.abc.net.au/news/2019-10-19/n...rt-ban/11616188

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Thereâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s more to nickel than just batteries

Tim Serjeant, Portfolio Manager/Analyst, Eley Griffiths Group

 

The supply side equation for Nickel as it stands today presents a bullish outlook.

 

Nickel Pig Iron (NPI) is ~950kt of the ~2.35Mt nickel market, so call it 40% of total supply. It has been a feature of the market since 2007 (all the incremental supply) where China has featured prominently, tapping cheaper ore sources, power and capital intensity advantages to drive down the cost of production for stainless steel. Forgive the history lesson, but the context is important.

 

read more - https://www.livewiremarkets.com/wires/recha...y-minerals-boom

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If I recall rightly, there have been a couple of broker revised targets - on the downside - for IGO recently. This might explain them coming off the boil. Don't follow MCR that closely si not sure what's happening there.

 

This recent article appearing in FT might also explain - Can this yearâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s nickel rally keep going? a couple of extracts below

 

Traders point to large withdrawals of nickel from warehouses run by the London Metal Exchange. Stocks on the LME have fallen almost 50 per cent since August. The exchange is supposed to be a last resort for consumers of the metal when supplies are short.

 

Another reason for a fall: there is a surplus of stainless steel in China, which is reflected by a weaker premium for prices of nickel in China compared with global benchmarks, according to Helen Lau, an analyst at Argonaut Securities in Hong Kong.

 

read more - https://www.ft.com/content/12336556-ea9c-11...f4-d00e5018f061

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