The conflict between Russia and Ukraine has escalated in recent days. In addition to the surge in natural gas and crude oil prices, the conflict may also impact the supply of non-ferrous metals including aluminum, nickel, and copper. According to TrendForce, nickel is a key upstream raw material for the manufacture of electric vehicle power batteries and mainly used in the production of ternary cathode materials. In 2021, global nickel mine production was approximately 2.7 million tons, originating primarily from Indonesia, the Philippines, and Russia. Russian nickel production accounts for approximately 9% of the world's total (including low, medium, and high-grade nickel), ranking third globally. At present, the market penetration rate of new energy vehicles is accelerating and ternary power batteries account for nearly half of power battery market share, which signals strengthening demand for upstream raw material nickel for automotive power batteries. Although Russian nickel exports remain unaffected for the time being, if the situation on the ground between Russia and Ukraine continues to deteriorate, global nickel supply may be impacted in the short term, pushing up nickel prices, and further increase cost pressures on end product markets such as the electric vehicle industry.
With the explosion of new energy vehicle (NEV) production and sales, the installed capacity of power batteries has also seen rapid growth, in turn promoting the rising demand for battery materials, according to TrendForce’s investigations. Among battery materials, cathode materials are most in demand for power batteries and their shipments have benefited from the rapid growth of the NEV market. It is estimated that the global demand for power battery cathode materials in 2021 will reach 600,000 tons and this number is expected to exceed 2.15 million tons by 2025.
Along with the swift development of the Chinese new energy vehicle (NEV) industry, the number of retired power batteries has risen year over year with Chinese waste power battery volume estimated to exceed 18GWh in 2021 and reach 91GWh by 2025, according to TrendForce’s latest investigations. Currently, power battery recycle and reuse is primarily divided into echelon utilization and material recycling. Chinese waste battery material recycling already possesses a certain scale with a 2020 market size of RMB2.4 billion and it is estimated to reach RMB26 billion by 2025.
As the global automotive industry picks up the pace of electrification, there will be a corresponding increase in the demand for nickel, which is a key ingredient for automotive batteries, according to TrendForce’s latest investigations. Incidentally, Indonesia has recently made gradual announcements indicating that it intends to terminate the export of such unprocessed ores as nickel, copper, and tin, and this restriction will likely have an impact on the global supply chains in which these materials are used. Indonesia possesses the world’s highest volume of nickel reserves (which refer to the total availability of nickel in the country), at 21 million tonnes, representing more than 20% of the global total. With regards to nickel production (which refers to the actual amount of nickel that is mined), on the other hand, Indonesia accounts for more than 30% of the global total. As such, Indonesia is the primary source of raw materials for NEV (new energy vehicle) batteries manufactured by countries such as China.
Polysilicon prices have seen continuous hikes in the past two weeks due to the explosion at Jiangsu Zhongneng’s chemical plant in Xinjiang and the impact of the COVID-19 pandemic, according to TrendForce’s latest investigations. In particular, mono polysilicon closing prices increased by more than 10% on average, which led wafer suppliers to increase wafer prices. As a result of rising wafer prices, the downswing in global PV module prices rebounded into an uptrend instead.