Nickel consumption in 2020 (kt)
Stainless steel production is the main area of nickel consumption (over 70% in 2020). There are many grades of stainless steel, with austenitic stainless steel being the most common family (over three quarters of global production), which includes the 300 series and 200 series.
The 300 series steels have higher nickel content, ranging typically between 8% and 12% but reaching 20% in certain grades. Nickel in these concentrations improves corrosion resistance and strength in a broad range of operating temperatures, ensures good ductility, resistance to aggressive environments, and makes the metal non-magnetic. This series is the most versatile and is widely used in the construction, food, chemical, transport, energy, and other industries.
In comparison, nickel content in the 200 series is lowered by alloying with manganese, and these steels are not complete substitutes for grades with high nickel content. The 200 series steels are prone to surface (pitting) corrosion, are not heat resistant and are not resistant to aggressive environments. However, due their lower cost, they are widely used in consumer goods such as domestic appliances. China and India alone account for over 90% of the global 200 series steel production.
Although they account for only 1% to 2% of global crude steel output, austenitic-ferritic (duplex) stainless steels also use nickel and are distinguished from other grades by a higher content of chromium (18% to 25%) and molybdenum (1% to 4%).
Ferritic and martensitic stainless steels (400 series) typically do not contain nickel, and their properties are similar to those of low-carbon corrosion-resistant steels; however, their mechanical properties are inferior to those of austenitic stainless steels. These steels are mainly used to manufacture automotive exhaust systems, cargo container frames, water heaters, cutlery, kitchenware, home decor items, and razor blades.
Stainless steel production uses almost all types of nickel feed (except for some special products, such as nickel powder and compounds). As nickel feed quality has practically no impact on the quality of stainless steel, steel mills predominantly use cheaper feeds. It is for this reason that high-grade nickel has been losing its share of nickel units consumed in stainless steel production in recent years.
In 2020, total stainless steel output decreased by 3% to 52 mln t. An increase in crude steel output in China (up 4% to 31 mln t) and Indonesia (up 20% to 2.7 mln t) was offset by steel output declines in other countries and regions due to the COVID-19 pandemic, led by Europe (- 10%), USA (- 18%), Japan (- 18%), India (- 30%) and Taiwan (- 14%).
Nonetheless, primary nickel consumption for stainless steel production grew by 3% to 1.78 mln t. This growth was completely offset by increased use of NPI (up 16% or 156 kt) in China and Indonesia, while the consumption of high grade nickel in stainless steel production dropped by 13%, or 85 kt, to 238 kt. NPI supply is expected to grow in the coming years, putting a significant pressure on high grade nickel consumption by the stainless steel sector.
The battery industry uses nickel as a key element in the production of cathode precursors for battery cells. However, nickel consumption trends vary depending on the type of battery.
 Lithium-ion batteries (Li-ion). Li-ion batteries were first commercially launched in 1991 and became widespread due to their ability to retain a high level of energy capacity, even after multiple recharge cycles. Lithium-cobalt cathodes were initially used in electronics. In the 2000s, nickel and aluminium and later manganese were also added to the composition.
 Nickel-metal hydride batteries (Ni-MH). Ni-MH batteries were developed in 1989 as a substitute for Ni-Cd batteries, to phase out cadmium. Currently, the nickel-metal hydride battery market is growing at a slow pace (with the hybrid vehicle projects of some manufacturers being its only growth driver) and is facing formidable competition from lithium-ion batteries.
 Nickel-cadmium batteries (Ni-Cd). These were the first batteries using nickel, developed back in 1899. These days their use is limited, as the EU prohibited cadmium on grounds of toxicity.
Growth in lithium battery production is primarily driven by road transport electrification. The 2016–2020 CAGR of electric vehicles (plug-in HEVs and battery electric vehicles) was over 40%. The impetus for transport electrification has come from government incentives, more stringent environmental regulations, improved battery performance, and lower production costs of battery cells.
In recent years, China has been one of the most important growth hubs for EV manufacturing, with plans to increase NEV (electric vehicles and plug-in hybrids) sales to 20% of total vehicle sales by 2025 and to 50% by 2035.
To this end, China implemented a number of initiatives to stimulate transport electrification, including subsidies for the purchase of electric cars and mandatory requirements for large automakers to produce electric vehicles and plug-in HEVs. However, government subsidies were slashed in the second half of 2019, leading to the first-ever decline in NEV sales for 12 consecutive months. As a result, NEV sales dropped by 44% in the first half of 2020. Sales increased as the nation’s economy quickly recovered in the second half of the year, posting a 5% annual growth for the full year – nonetheless a multi-year low.
It was against this backdrop, that Europe became the new global driver of EV sales growth. In a number of countries, including Belgium, Germany, the UK and France, buyers receive handsome subsidies and tax incentives for buying EVs; in Norway, where EVs account for 54% of total vehicles sold in 2020, buyers are exempted from vehicle registration tax and value added tax (VAT).
Europe’s share of global EV sales grew from 26% in 2019 to 44% in 2020. In March 2019, the European Commission approved new requirements for greenhouse gas emissions from road transport, which call for a more than 2X reduction of CO2 emissions by 2030 from a 2018 baseline. The initiative pressures automakers to expedite electrification under the threat of fines reaching into thebillions. Also, the European Green Deal, a plan to achieve carbon neutrality and net-zero emissions by transition from fossil to renewable energy, was adopted. A battery production chain is being developed in the region in anticipation of increased demand. The total announced capacity of key producers (CATL, LG Chem, SK Innovation, Samsung, Northvolt and others) already exceeds 500 GWh by 2025, which would be equivalent to 400 ktpa of nickel. By 2030, total capacity is expected to exceed 700 GW•h (about 600 kt of nickel per year).
Battery cell production is one of the final stages of battery manufacturing, preceded by the production of cathode precursors (hydroxides of transition metals) and then, the production of cathode material itself by thermal conversion into oxide when lithium is added. The main hubs of cathode precursor production in 2020 included China (63% of global production), Japan (28%) and South Korea (9%).
There are several types of lithium-ion batteries available depending on the cathode materials used: LCO (lithium, cobalt oxide), LFP (lithium, iron phosphate), LMO (lithium, manganese oxide), NCM (nickel, cobalt, manganese) and NCA (nickel, cobalt, aluminium).
LCO batteries are principally confined to mobile electronics, as the small size of the market, high cobalt prices and low power prevent their application in EVs. However, other types of cathodes are widely employed in the EV sector. The current trend is the growing global share of nickel-containing NCM and NCA batteries, owing to their higher energy density and specific energy, which increases drive range. LFP batteries for cars are made only in China, where these batteries accounted for about 30% of the total in 2020.
Growing nickel consumption in Li-ion batteries is driven not only by an increasing share of nickel-containing batteries but also by a higher average nickel content in the cathode material, which, in turn, is caused by the need to replace expensive cobalt units and increase energy density. In comparison to 2016, when NCM 1:1:1 (with a nickel mass fraction of 20% of the total cathode mass) accounted for the lion’s share of compounds in cathode materials, 2020 saw nickel-intensive compounds – NCM 6:2:2, NCM 5:3:2, and NCM 8:1:1 – take the lead. Going forward, conversion to NCMA (nickel, cobalt, manganese, aluminium) with a higher content of nickel is expected, and some producers announced plans to launch commercial production of LNO (lithium, nickel oxide), a cathode material with nickel content exceeding 50%.
The growing popularity of electric and hybrid cars, along with the evolution of cathode technology towards nickel-intensive types add to the tailwinds for significant growth in primary nickel consumption by the industry in the longer run.
In 2020, total nickel consumption in other industries (alloys, special steels, electroplating) dropped by 14%, or 71 kt, amid weaker end consumer demand due to COVID-19 restrictions. These sectors are expected to recover in 2021 albeit at the rates below pre-pandemic levels.