Sumitomo Metal plans to increase its monthly cathode material production capacity to 7,000mt by 2025 from the existing capacity of 5,000mt to meet rising demand from electric vehicle (EV) producers. The company aims at a monthly output of 10,000mt by 2027.
The company stated nickel demand for rechargeable batteries is forecast at 228,000mt in 2021, which is 193,000mt higher than in 2020. In 2021, the global nickel market surplus is expected to 58,000mt from 132,000mt in 2020 amid strong demand from the stainless steel industry. The increased demand from the SS industry has helped offset the rise in Indonesia’s nickel pig iron production.
The company estimates in 2021, the global nickel demand for batteries will spike by 18pc from 2020, driven by strong demand for electric vehicles in China.
Sumitomo Metal will invest JPY47bn ($428mn) to expand its cathode material manufacturing capacity to cater to growing demand from battery makers. The company’s existing buyers include Panasonic and Toyota, and its main products are nickel cobalt aluminum oxide (NCA) and nickel manganese cobalt oxide (NCM), which have relatively high nickel content.
The new nickel-based cathode material facility will be built in Bess, Ehime Prefecture, in western Japan. The company will also expand its capacity at Harima Refinery in Kuku Prefecture, also in western Japan. The two facilities will be operational in 2025.