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Shipfix Nickel Ore Index: Tracking nickel ore supply vs. nickel prices

By Olga on September, 30 2020

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During the Tesla Annual Shareholders Meeting and Battery Day last week, Elon Musk announced an ambitious innovation plan focusing on Tesla’s own batteries production and a more affordable range of electric vehicles. Tesla’s CEO added that the supply of nickel is instrumental to scale up battery manufacturing and urged producers to mine more nickel. Musk’s goal is to phase out the cobalt that is currently used in battery cathodes in favor of cheaper nickel.

Shipfix provides unique coverage of nickel ore order volumes which can be leveraged to support your trade ideas, market analysis and supply chain forecasts.

Shipfix provides unprecedented data insights on future commodity volumes up to 3 months before it show in traditional supply chain data sources.

Benefits of the Shipfix dataset:

  • Daily market sentiment at the earliest stage of the supply chain by measuring trade orders before physical trade flows occur.
  • Commodity price movements prediction

According to Reuters, “traders and analysts say the kinds of volumes Tesla would need are unlikely to make a compelling business case for miners to invest in increased production, nor are they likely to boost prices in the medium term because the market is in surplus”. Nevertheless, electric vehicles are expected to be the fastest growth market for nickel miners in comparison with traditional industries such as stainless steel makers.

Nickel hit a 14-month low of $10,806 a tonne in March but has since recovered to $15,676, still down by ca. 15% from five-year peaks seen in September last year.

The Shipfix Nickel Ore Index tracks order sentiment for the volume of nickel ore shipped since 2015. This index shows a strong correlation to nickel price.

 

 

Nickel ore supply chain review: Breakdown analysis by main exporters/importers

Nickel ore exports / imports are highly concentrated. According to Shipfix 2019-2020 data, 70% of seaborne exports are coming from three countries: Indonesia (40%), New Caledonia (15.5%) and the Philippines (14%).

Based on our latest review 90% of seaborne nickel ore trade goes to Asia, predominantly China (70%), the rest is divided between South Korea and Japan.

There is a growing anxiety in the electric car industry over supply of the industrial metal, which is vital for boosting the range of electric car batteries. Demand for nickel, which is also used in stainless steel, is expected to increase six-fold by 2030”.

 

Shipfix data is key to analyse historical trade flows and to identify shifts in import/export trends over time.

In January 2020 Indonesia banned exports of raw nickel ore in order to boost the domestic production of finished goods. This ban was instantly reflected in our sub-index graph revealing Indonesian nickel ore export.

We are now seeing competing nickel ore suppliers regularly appearing in China’s import figures; this includes Guatemala and Turkey.

The graph below highlights nickel ore global trade routes since the beginning of 2019 based on Shipfix trade flows and data contribution.

 

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