Battery-Grade Nickel Refining Market Assessment
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Due to their higher nickel content, high-grade sulfide ores are typically used as the preferred feedstock for the production of Class 1 nickel, which is then upgraded into high-purity nickel sulfate suitable for batteries. However, in recent years there has been a growing tendency to increase battery-grade nickel sulfate production from mixed hydroxide precipitate (MHP) and mixed sulfide precipitate (MSP) intermediates produced from lower-grade laterite ores through a high-pressure acid leach (HPAL) process. In general, the nickel and cobalt yield of MHP is higher than that of MSP, containing up to 55% nickel and 4.5% cobalt content respectively, although current applications suggest an average nickel content of 38% in MHP intermediates.
In 2022, global battery-grade nickel sulfate production grew by 19.7% year-on-year, and is projected to increase by a further 10.6% in the full-year projection for 2023. Unlike the majority of segments of the EV supply chain, the battery-grade nickel market shows higher levels of geographical fragmentation although only three companies currently supply over half of global high-grade nickel. In 2021, Russia was the biggest supplier of high-grade nickel at a market share of 21%, although Stratas Advisors estimates that this share fell to 16.7% in 2022 as a result of globally disrupted supply chains. In 2023, Russia’s market share could fall by a further 2 percentage points as logistics disruptions persist. However, Norilsk Nickel is expected to remain the leading nickel sulfate refiner through 2030 despite seeing significant market share losses.
The midstream nickel market witnesses strong levels of fragmentation, with global supply significantly shifting away from Russia to other markets, in particular Australia and Asia Pacific. While current market leaders remain dominant in the medium term, nickel sulfate refining sees a stronger penetration of new players than the cobalt market despite the complexity of the refining process, which also provides opportunities for niche players that specialize in certain aspects of the refining process. This reflects a changing pattern in the type of feedstock used, with sulfate production from sulfide deposits becoming less popular among smaller players which in most cases cannot easily secure access to high-grade ores, currently controlled by a small number of large mining companies. In contrast, high-grade nickel production from laterite ores offers an opportunity for smaller-scale production and higher geographical dispersion, leading to the emergence of MHP and MSP producers around the world. In fact, high-grade sulfide feedstock for battery-grade nickel production sees a steep market share loss by 2030, with MHP/MSP feedstocks registering a CAGR of 28.1% over the forecast period in nickel content. As a result, MHP/MSP feedstocks could potentially feed about 27% of global battery-grade nickel sulfate production by 2030. In terms of total nickel feedstock being allocated to battery cathode material, Stratas Advisors expects battery-grade nickel sulfate production to grow to account for almost 30% of the global supply of nickel by 2030.
This report is part of a series covering all segments of the EV supply chain, and contains strategic insights on growth projections and production trends across major markets and 40+ players, outlining key investments which help shape estimates on annual supply through 2030.
- Global supply of battery-grade nickel sulfate grows at a CAGR of 13.4% over 2022-2030, absorbing about 30% of global total supply of nickel feedstock by the end of the decade
- Norilsk remains the leading nickel sulfate refiner through 2030, although supply shifts significantly from Russia to other markets, especially Australia and Asia Pacific
- Investments in high-pressure acid leach (HPAL) plants reflect a tendency to increasingly replace high-grade sulfide feedstocks for cobalt and nickel intermediate products in the form of mixed hydroxide precipitate (MHP) and mixed sulfate precipitate (MSP), projected to account for over 27% of the feedstock used to produce battery-grade nickel sulfate by 2030
- The growing shift from sulfide to MHP/MSP feedstocks offers an opportunity for smaller-scale and geographically dispersed market players, with new entrants reaching a market share of over 19% by 2030
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