#Tesla or #Tsingshan: #nickel market at crossroads
Nickel buyers on the London Metal Exchange (LME) got a taste of this feeling at the end of February. The metal’s price dived from almost $20,000 (£14,500) a tonne (t) in the last week of February to just over $16,100/t by the first week of March.
Chinese steelmaker Tsingshan sent shockwaves through the mining industry when it announced (according Reuters) it had signed a deal to supply two battery manufacturers with 100,000 tonnes of nickel matte. Some context is needed for this to make sense as news that could knock 20 per cent off the nickel price.
This Tsingshan deal effectively sees the company promise to fill class 1 demand with class 2 supply, possibly removing the price gap and supply concerns. Nickel matte, which Tsingshan is selling, is the last step in a lot of processing that sees Tsingshan’s laterite ore turned to nickel pig iron, then into nickel matte, which can be then processed into pure nickel as needed by the battery makers. This isn’t just sending the ore around the plant a few more times, this process will add cost and the carbon footprint compared to class 1 nickel supply.