MetalMiner October Newsletter
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Analyst Commentary
The EV Market's Impact on Nickel and Copper Prices
The electric vehicle (EV) market remains a hot topic in commodities, especially regarding nickel and copper. As the world chases cheaper (and sometimes, but not always, greener) energy and transportation via EVs, many believe demand for these metals will surge, given their current role in EV batteries and components.
But this is not a certainty. Indeed, many forces (which we’ll explore in a minute) are at play, outside of EV demand as a separate item entirely. This raises the question we wish we had a long-term crystal ball to answer: will current dynamics and the emerging environment lead to a sustained market rally for nickel and copper, or are we setting ourselves up for a market swing in a different direction—or a sideways band?
Let's dig in.
Nickel: The Real Deal Yankees or the Imposter Mets?
Nickel plays a starring role in lithium-ion batteries, which power EVs. With its energy-dense properties, it's a key secret ingredient, and, at least at present, one of the keys to maximizing range based on battery composition. Yet, nickel prices have taken a medium-term dive, dropping 47.1% from a 2023 high and plummeting 66.1% from 2022 levels. Despite a recent month-over-month increase, nickel prices remain sideways in their current trading band.
Why? In part because Indonesia has flooded the market with supply, causing a price collapse faster than a Tesla on autopilot heading for a brick wall.
Looking ahead, nickel demand could pick up—thanks to EV growth—reaching 665,000 tonnes by 2025, according to the IEA. But here’s the catch: battery makers need high-purity Class I nickel, not the low-grade stuff, so the supply chain has its work cut out. And with lithium-iron-phosphate (LFP) batteries gaining ground, which don’t need nickel, the future may feel more like a Ford F-150 Lightning that’s run out of juice.
And as an aside: yes, our money is on NY’s only real baseball team in the fall classic.?
Copper: Electrification’s Backbone or Another Metal Under Siege?
Copper is another unsung hero in the EV market, running through the wiring and motors like coffee and Zyn through an AI developer’s veins. Yet, despite its importance, the copper market is underfunded, thanks to red tape and NIMBY concerns in mining. This could lead to possible supply constraints as the world goes electric.
Demand for copper is set to rise, but don’t expect it to necessarily rocket. Aluminum is creeping into areas traditionally owned by copper, reducing the need for the red metal. MetalMiner is encouraging buying organizations to take a conservative approach to buying in the current market, perhaps looking ahead to lock in demand for the quarter to come (or less time, if they’re so inclined).
领英推荐
We should reiterate the obvious: the EV market will continue to impact nickel and copper prices. But don’t hold your breath for a straight shot to the moon or the inverse. Nickel’s future depends on battery innovations, while copper faces underinvestment and likely competition from alternatives.
- Jason Busch
Lower Steel Prices Drag Steelmakers
Q3 financial results started to drip in, with?Nucor?and?SDI?leading the way. Both steelmakers saw their overall performance dip considerably as a result of?lower steel prices. SDI, however, managed a modest 0.96% quarterly increase in flat rolled shipments, while Nucor saw a 1.36% drop from Q2.?
Although it remains to be seen what both U.S. Steel and Cliffs will report, as the largest U.S. producer, Nucor’s results are likely more emblematic of the?overall market conditions. Nucor’s expectations for Q4 suggest little optimism. The mill forecasts lower earnings as a result of declining average selling prices and volumes. The conclusion of mill maintenance outages in November will offer no support to prices and likely exacerbate the impact of weaker demand conditions. Meanwhile, SDI offered no outlook for the final months of the year, but noted 2025 could see both prices and demand recover as a result of lower interest rates, manufacturing onshoring, trade barriers and infrastructure projects.?
Source: MetalMiner Insights
Piece of Recommended Content
Visual Capitalist and BHP Shed Light on Copper Demand Projections
While we here at MetalMiner raise an eyebrow at extremely high copper demand expectations, not all agree! BHP and The Visual Capitalist have shed some light on how and why high copper projections are expected to sky rocket.?
?Copper's key role in electrification, renewable energy, electric vehicles, and data centers is projected to ensure its continued importance, despite supply challenges from aging mines and high project costs. See the below chart:
Don't be Caught Off-Guard by Your Executive Team
Communicate price volatility isn't the only thing that it takes to satisfy your executive team. Knowing how to accurately communicating key commodity trends and correlations between commodities is just as important. Read our free resource How Executive Teams Expect Procurement to Save Money.