Nickel prices are surging at this time as the prices of cobalt, one of the core materials for electric vehicles (EV) batteries, have slowed. Ecopro and L & F, which are focusing on the expansion of high-nickel anode materials with high nickel content, are expected to be affected negatively.
According to the Korea Mineral Resources Corporation (KEMCO) on the 22nd, the price of nickel has been steadily rising from $10,000 per ton in January to $13,000 in March. An additional price increase is expected to rise due to lack of inventory. The inventories are at the lowest level since 2013, at 180,000 tons. Compared with the inventory in March last year (320,000 tons), it is about half as small.
Cobalt, which caused concerns over rising prices in the industry, has decreased in price from the $40,000 range in January to the $30,000 range this month. It is selling at less than half the price compared to the $90,000 mark last March.
The rise in nickel prices is attributable to the expansion of EV battery demand and the booming construction industry in China. Nickel is used not only for batteries but also for various structural special steels, stainless steels, and high strength rebars. With the booming construction, the price increases.
Ecopro and L&F mainly produce nickel, cobalt, and manganese (NCM) 622 or over with increased content of nickel. Ecopro's battery anode production capacity last year was 16,800 tons. It will increase to 55,000 tons by October this year. At the Pohang 3 plant, which is under construction together with Ochang 1 and 2 plants, the anode material production capacity will be gradually increased over the next five years.
In May last year, L&F is proceeding with its facility expansion by investing 77 billion won to expand production of anode materials from about 15,000 tons to 25,000 tons by October this year. In January of this year, it decided to invest an additional 70 billion won. The company has planned to expand the capacity of the anode material to 12,000 tons aiming to start the operation by the second quarter of next year. The goal is to produce high-nickel anode materials containing 70~80% nickel.
The anode material is one of the four battery materials (anode material, cathode material, separator, electrolyte). It accounts for 35~40% of battery cost. Nickel is used as an anode material for medium and large batteries for EVs. The more nickel, the greater the energy density. With more nickel contents, the mileage upon one-time full charge increases. Instead of costly cobalt, nickel has been used to reduce costs and improve battery performance. However, as nickel prices rise, the cost burden increases. For one EV, NCM622 requires 12Kg of cobalt, 7.4Kg of lithium, and 36Kg of nickel. NCM811 contains 6.6Kg of cobalt, 8.4Kg of lithium and 52Kg of nickel. In the industry, as in the case of cobalt price surge, companies plan to secure inventories and linked sale price changes.
An official of Ecopro said, "There have been several concerns over the rise in nickel prices last year, and we are working to solve problems from a mid- to long-term perspective, not short-term. There will be no immediate impact on our anode production."