Sumitomo Metals and Mining indicated that global nickel demand for batteries is expected to increase by 18pc to 228,000mt in 2021 compared to 193,000 in 2020.
Media reports noted that Sumitomo expects the overall demand for nickel is expected to rise by 9.2pc to 2.58mn mt globally in 2021 while supply is expected to grow by 5.8pc to 2.638mn mt this year.
In Japan, Sumitomo forecast nickel demand to increase by 15.7pc to 167,400mt while supply could drop by 2.4pc to 165,800mt this year.
Apart from being used in manufacturing stainless steel, nickel’s usage has now expanded to being a vital ingredient in the production of lithium-ion batteries used in electric vehicles (EV), the company stated.
LME nickel stock has dropped by more than 30,000mt in the last two months indicating a strong increase in nickel demand, especially in China where EV sales have grown significantly despite being affected by the pandemic.
The Japanese firm also stated that the nickel surplus will reduce to 58,000mt this year compared to a surplus of 132,000mt as the growing demand in the stainless steel sector will offset the high production of nickel pig iron (NPI) in Indonesia.
Although the global nickel market was 34,900mt in deficit at the beginning of 2021, it is expected to be in surplus by the end of this year as Indonesia starts more NPI projects later this year, media reports noted.