Russo-Ukraine war is affecting nickel prices. Russia is the largest producer of nickel. Nickel rose 250 percent in two days on the LME. Due to the unexpected rise, the exchange suspended trading in nickel.
Nickel Price Hike: The impact of Russia-Ukraine is not only on crude inflation, but also on nickel, lithium and other metals. Due to this geopolitical tension, there was a historic rise in nickel. Nickel prices jumped more than 250 percent in the last two days. The London Metal Exchange (LME) has suspended trading due to the unexpected rise in nickel. On Tuesday, the prices of London nickel crossed $ 1 lakh per ton for the first time. Russia is the third largest producer of nickel and the supply has decreased due to the war.
The impact of the rise of nickel can have an impact on car manufacturers, especially companies making electric vehicles. The highest demand for nickel is in stainless steel and electric vehicles (EV).
where is the demand for nickel?
Russia is the largest nickel producer country in the world. At the same time, production has also decreased in Indonesia, a major producer of nickel. Due to the Russo-Ukraine war, the supply is being badly affected. Russia supplies 6 percent of the nickel in the global market. The highest demand for nickel is found in about 70 percent of stainless steel.
After this, 7 percent of the demand is for making batteries for electric vehicles. Pure nickel is used in EV batteries. Russia's MMC Norlisk alone produces 17 percent of pure nickel. In such a situation, the direct effect of increasing the price of nickel can be on the EV car manufacturer. In addition, about 16 percent nickel is used in alloys. The stock on LME has declined 70 per cent since April last year. The LME stock is close to 77,000 tonnes. Whereas, the estimated demand is 30 lakh tonnes.
The cost of EV batteries will increase!
According to the US Geological Survey, Russia is the world's third largest producer of nickel, says Ajay Kedia, director of Kedia Commodities. In this, two-thirds of the nickel is used to make stainless steel. In addition, electric vehicles are a key component to the rapidly growing market for batteries. The cost of batteries may increase due to rising nickel prices. Earlier the cost of batteries was decreasing, but now the reserve trend is being seen in them.
The most expensive part in EVs is the batteries. In such a situation, the opposite effect of increasing prices can be on EV demand. The enthusiasm that is being seen about technology in the automobile sector, it may get a setback due to the increase in cost.
Nickel up 250% in 2 days on LME
The London Metal Exchange halted trading following an unexpected rally in its nickel market. In the last two days, nickel prices jumped more than 250 percent to cross $100,000 per ton for the first time. On Tuesday, the price of nickel on MCX jumped more than 40 percent to Rs 5,275.