- Write by:
-
Saturday, February 27, 2021 - 12:31:20 PM
-
664 Visit
-
Print
Mining News Pro - New study shows Asian cathode, precursor producers’ control of nickel, cobalt supply go way beyond long-term off-take agreements
Chinese Foreign Ministry spokesman Zhao Lijian said “artificial efforts to shift these chains and to decouple is not realistic,” urging Washington to “uphold the safety and reliability and stability of global supply chains.”
The Biden administration has acknowledged that making the US more self-sufficient would not be achieved overnight but the scale of the task may be underestimated.
In the battery supply chain for energy storage and electric vehicles, China’s command of the market is startling, and wresting it away is likely a decades-long process.
A new report by Roskill on the global cathode and precursor market out to 2030 lays bare how dependent developed markets, particularly Europe, are on China for mined material, precursors and cathode components.
The cathode market is dominated by NCM (nickel-cobalt-manganese) and NCA (nickel-cobalt-aluminum) chemistries and China controls 80% of the precursor market and the bulk of cathode production, according to the London-HQ research company.
Eileen Wu, consultant based in Roskill’s China office, says apart from signing long-term offtake agreements with producers to secure the supply of cobalt, manganese and nickel the trend of cathode and precursors companies integrating upstream operations has become more and more obvious.
More than 50% of nickel in the global precursor supply chain now comes from integrated operations. That figure is 30% for cobalt and more than 20% for Ni-Co – mostly from laterite ore in Indonesia (the subject of a WTO dispute), the Philippines and Papua New Guinea.
Those numbers are lower for cathode producers, but as recycling becomes a more significant source of raw materials for the ternary battery market, further integration should be expected, says Wu.
Wu says integrated operations do not only enjoy greater security of mine supply, but are also able to scale up better as the market embarks on rapid growth and, crucially, are able to maintain a lower cost base.
Integrated operations occupy the lower half of the cost curve and the gap between the lowest and highest cost producers has now expanded to 30%.
For cathode materials, in terms of self-sufficiency, the US and Europe lag far behind China, Japan (Panasonic, Tesla’s main supplier) and South Korea (LG Energy Solutions, the no. 1 battery supplier to the passenger car market).
Europe will show modest gains towards 2030, but the US position will deteriorate over the next decade. Japan and South Korea’s battery export capability also provides a boost to the countries’ automakers like Nissan and Hyundai, which can supply their factories in Europe and the US from their home bases.
In the precursor market, developed economies are stuck in neutral and reliance on China will remain a feature of the battery supply chain for the long term.
Electric vehicle sales more than doubled in Europe in 2020, surpassing China as the number one market, but the continent’s ambitions to create a large-scale domestic battery manufacturing industry face serious raw material constraints and a significantly higher cost base than Asian integrated companies.
Wu says raw material costs are the main variable for cathode and precursor manufacturing costs and prices are expected to continue to rise from multi-year lows struck last year by an average of 35% by 2030, driven mainly by nickel and cobalt.
Given the raw material forecast, carmakers will have to rely on technology and production process breakthroughs in order to drive down battery costs and make electric vehicles compete better with the internal combustion engine.
Short Link:
https://www.miningnews.ir/En/News/611608
Oxford Economics Australia has released data showing mine maintenance spending may be hitting its peak. But what does it ...
Copper climbed above $10,000 a ton as predictions for tighter global supplies and rising consumption in electric ...
Canada’s mining industry is pushing for an carveout to the federal government’s proposed increase to capital gains ...
Copper output in Chile, the world’s largest producer of the metal, edged down in March, data from copper commission ...
Panama’s president-elect has ruled out talks with Canadian miner First Quantum Minerals until it drops multiple ...
Botswana President Mokgweetsi Masisi vowed to protect the country’s interests, including its 15% stake in diamond giant ...
Europe’s largest copper producer Aurubis AG reported first-half core profit above expectations on Wednesday, helped by ...
Copper briefly traded through $10,000 a ton as investors raised bets on Federal Reserve rate cuts, and Goldman Sachs ...
BHP’s plan to divest the South African assets of its target Anglo American are key to the strategy behind the proposed ...
No comments have been posted yet ...