Nickel rally fragile as looming supply cools battery dreams

Shanghai

FORGET electric vehicles for now. Nickel must first contend with a new wave of supply from Indonesia and the Philippines, as well as a Chinese stainless steel market that's at risk of slowing after a two-year boom.

The metal climbed to the highest level this month since June 2015, lifted by predictions of a jump in demand from electric vehicles. But prices have since retreated as the boost from new energy vehicles lies several years in the future and investors reset their focus on more immediate concerns. Batteries will represent only 3 per cent of demand this year, compared with the two-thirds used in stainless steel, according to the International Nickel Study Group.