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 falling by about two-thirds, an executive from the Chinese battery material supplier said, a prediction that if fulfilled, points to sharply lower battery costs that could benefit firms like Tesla.

As capacity grows, the price of the metal should fall to $8,000 a tonne, down from $24,000 a tonne now, Yang Shunyi, vice general manager of BTR, told the China Automotive Battery Innovation Alliance forum in Changzhou city on Thursday.

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This would bring down costs of cathode materials with 90% nickel used in batteries powering electric cars by 30%, Yang said.

Yang said he visited nickel producers in Indonesia two weeks ago and he estimated its planned nickel refinery capacity could supply about 4 million tons of nickel-based cathode or 3 gigawatt hours of batteries annually.

“As those projects roll out production this year, the demand and supply is reversed with supply of nickel outweighing demand in 2023. Nickel price is bound to fall downward and in the middle to long term, it will stay at around $8,000,” he said.

BTR is one of China’s largest makers of lithium-ion battery materials. The electric vehicle industry uses nickel extensively and several automakers have signed deals with production centers such as Indonesia in recent years.

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

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

High-nickel cathode can help batteries achieve higher energy density and extend driving range, a key factor in achieving a shift to EVs.

EV makers have been using cheaper lithium iron phosphate (LFP) batteries with lower energy density to power compact and medium-sized EVs but larger-sized products such as pickups need higher energy density to be competitive against internal combustion engine vehicles, analysts say. (Reporting by Zhang Yan and Brenda Goh; Editing by Robert Birsel)