China’s BTR sees nickel price falling two-thirds to $8,000 a tonne

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SHANGHAI — BTR New Material Group sees the price of nickel drop by about two-thirds, said an executive from the Chinese battery materials supplier, an expectation that if met would point to a sharp drop in battery costs that could benefit companies like Tesla.

As capacity grows, the price of the metal should drop to $8,000 a ton, down from $24,000 a ton now, Yang Shunyi, deputy general manager of BTR, told the China Automotive Battery Innovation Alliance Forum in Changzhou on Thursday.

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This should cut costs for cathode materials, which contain 90 percent nickel, used in batteries to power electric cars, Yang said, by 30 percent.

Yang said he visited nickel producers in Indonesia two weeks ago, and estimated that the planned nickel refining capacity could provide about 4 million tons of nickel-based cathodes or 3 GWh of batteries per year.

“As these projects go into production this year, supply and demand reverse with more nickel supply than demand in 2023. The price of nickel is bound to fall and, in the medium to long term, it will remain at around $8,000,” he said. He said. .

BTR is one of the largest manufacturers of lithium-ion battery materials in China. The electric car industry makes extensive use of nickel and several automakers have signed deals with production centers such as Indonesia in recent years.

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In 2020, Tesla chief Elon Musk urged miners to produce more nickel, warning that the cost of batteries was a major obstacle to his company’s growth.

Reuters previously reported that Tesla is looking to use a cathode containing more than 90% nickel in its next generation of large cylindrical battery cells known as the 4680.

The high-nickel cathode can help batteries achieve higher energy density and extend the driving range, which is a key factor in realizing the transition to electric vehicles.

Electric vehicle makers use cheaper lithium iron phosphate (LFP) batteries with a lower energy density to power compact and midsize EVs, but larger products such as pickup trucks need higher energy densities to be competitive against internal combustion engine vehicles, analysts say. (Reporting by Zhang Yan and Brenda Goh; Editing by Robert Purcell)