The price of nickel climbed in the week ended Jan. 14 to highs last seen in 2011, due in part to low inventories and bullishness over growing metal demand from battery-powered electric vehicles.
Nickel's drive to over $22,000 per tonne came as recent vehicle sales data continued to show consumers increasingly opting for EVs, many of which contain nickel-heavy lithium-ion batteries.
In China, new-energy vehicle deliveries, which include plug-in battery cars, hit 2.99 million units in 2021, according to media reports.
The China Passenger Car Association also boosted its 2022 new-energy sales forecast to 5.5 million units from 4.8 million units, Bloomberg News reported.
Other metals also stand to benefit from the EV shift.
"The EV sector remained a strong influence in the commodities realm, fueling demand and therefore prices for copper, cobalt and nickel," S&P Global Market commodities analyst Aude Marjolin said in a Jan. 12 report.
Price ring
In base metals, nickel rose 7.5% to $22,417/t and copper climbed 2.9% to $9,972.25/t, while lead and zinc gained 3.5% and 0.6%, respectively, to $2,373/t and $3,581.85/t.
Iron ore held even week over week, closing at $126.24/t, up slightly from $126.21/t.
In precious metals, the gold price increased 1.7% to $1,821.25 per ounce, while silver climbed 3.9% to $23.10/oz. Palladium and platinum moved in separate directions, with palladium down 1.8% to $1,870/oz and platinum up 2.0% to $979/oz.
Talking points
After a strong showing in 2021, the copper price could start to unwind in 2022 as new supply comes to the market, Credit Suisse analysts wrote in a Jan. 14 research report.
Bullishness over copper, in part driven by growing demand for copper-intensive EVs, pushed the red metal to record highs exceeding US$10,000/t in 2021. But the Credit Suisse analysts said they expect the price to pull back later in 2022 and drop to about $3.20/lb, or a little over US$7,000/t, in 2024.
Growing mine output until about mid-decade and dissipating bottlenecks in shipping are set to boost supply.
"The fundamental copper dynamic is mine supply growth of 5-7% in 2022-23 from mine projects — including two big new mine starts — sanctioned before 2019, which should exceed global demand of +3.5%," the analysts estimated.
Financings
In larger financings, Commercial Metals Co. raised $600 million in a two-part offering to repay debt and for general corporate spending. The debt financing comprised two $300 million tranches of 4.125% senior unsecured notes due 2030 and 4.375% senior unsecured notes due 2032.
Cypress Development Corp. outlined plans to raise C$16 million, issuing 8 million units priced at C$2 per share.
Electra Battery Materials Corp. announced financing for up to C$20 million in an at-the-market offering agreement with CIBC Capital Markets as it focuses on building a battery-metals processing hub in Ontario.
