The Metal That Worries Tesla Most Is Getting Much Cheaper

Article content

Bloomberg News

(Bloomberg) —

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

The Metal That Worries Tesla Most Is Getting Much Cheaper Back to video

Nickel tumbled after a major Chinese producer’s unexpected plan to add supply eased concerns about a structural deficit for materials vital to the global clean-energy transition.

Tsingshan Holding Group Co., the world’s biggest stainless steel producer, said Wednesday it will supply nickel matte to Huayou Cobalt and CNGR Advanced Material Co. starting October and plans to expand its investments in Indonesia. Matte is an intermediate product made from concentrate that can be further processed into battery-grade nickel chemicals.

Nickel was trading at a six-year high as recently as last week on expectations surging demand from the electric-vehicle sector would spur a shortage. Tsingshan’s move allows it to switch between making materials for stainless steel or batteries, and has so far spurred a more than 10% drop in refined nickel prices over two days.

Nickel-pig-iron producers can now make nickel matte by slightly adjusting the manufacturing process, said Celia Wang, an analyst at Mysteel. This will “substantially ease” concerns of a shortage of battery materials, she said.

While the upside in nickel prices will be capped until October, when Tsingshan is set to start deliveries, the market will monitor progress as there’s the possibility of setbacks considering the new technology, Wang said.

Nickel fell as much as 5.6% to 130,510 yuan ($20,170) a ton on the Shanghai Futures Exchange, dropping by the daily limit. Futures on the London Metal Exchange slumped as much as 5%, extending Wednesday’s 6.7% decline. Other base metals were broadly lower.

©2021 Bloomberg L.P.

Bloomberg.com