SEOUL/BEIJING- Asian battery makers for electric vehicles are shielded from a big, immediate hit from surging nickel prices amid Russia’s invasion of Ukraine, thanks to long-term contracts and a diversified supply chain, companies and industry sources said.
Nickel prices doubled on Tuesday to more than $100,000 per ton, a surge sources blamed on short covering by one of the world’s top producers, forcing the London Metal Exchange (LME) to halt nickel trading.
Tsingshan Holding Group bought large amounts of nickel to reduce its short bets on the metal, sources said. Shares of companies exposed to the Chinese producer tumbled on Wednesday.
“We have long-term supply contracts with metal suppliers and producers, so we are not expecting any immediate impact on our nickel supplies,” said an official at South Korea’s SK Innovation, whose battery unit SK On supplies to Ford and Kia.
Another official at a South Korean major battery manufacturer, who declined to be identified because the company has not made a statement on the matter, said the firm sources nickel from various countries including Australia and Indonesia so there was “very limited impact” on its nickel procurement for now.
Both officials said the companies were closely monitoring the situation after LME’s unusual move.
The recent surge in nickel have not had a serious impact on the EV supply chain because Indonesia and other places have the largest nickel mines and the size of Russia’s nickel mines is not particularly big, Cui Dongshu, secretary-general of the China Passenger Car Association, said.
Russia accounts for 5 percent of global nickel production but supplies a fifth of the world’s high-grade nickel, according to an estimate from Benchmark Mineral Intelligence (BMI).
Prices of the metal were rising even before Russia invaded Ukraine as inventory dwindled due to battery makers such as SK Innovation and compatriots LG Energy Solution (LGES) and Samsung SDI, China’s CATL and Japan’s Panasonic increasing production to meet growing demand. — Reuters
