DEZHOU, China, Aug 26 (Reuters) - The global markets of nickel, lithium and cobalt - three of the key metals used in electric vehicle batteries - are expected to be in surplus in 2022, an analyst with Chinese state-backed research house Antaike said on Friday.
The nickel market could see an excess of 111,000 tonnes globally in 2022 and a surplus of 122,000 tonnes in 2023, swinging from a deficit of 157,000 tonnes in 2021, said chief analyst Xu Aidong at the Antaike China battery metals conference.
New capacity in Indonesia could raise global nickel production 20% annually in 2022 to 3.14 million tonnes and another 8% in 2023 to 3.41 million tonnes, data from Antaike showed.
Antaike forecast average price of nickel on the London Metal Exchange to fall an annual 20% in 2023 to $20,000 a tonne, following a 35% jump in 2022 to $25,000 a tonne that was partly due to an LME nickel trading crisis in March. However, short-term nickel price could be supported by rising ore and electricity costs. A potential Indonesian nickel export tax would also push up short-term prices, she added. "Once tax is imposed, nickel prices will rise in short term. But it's unlikely to last as production ramp-up would exert some downward pressure on the market," Xu said.
The global lithium market is expected to be in surplus of 30,000 tonnes lithium carbonate equivalent (LCE) this year, expanding from a 6,000-tonne LCE surplus in 2021.
However, the Chinese lithium market bucked the global trend. Antaike forecast a deficit of 12,000 tonnes LCE for China in 2022.
Chinese lithium prices surged as demand from the booming EV industry outpaced slow growth in the upstream sector due to slow approvals and emission restrictions, Xu said.
China's recent power rationing in Sichuan and Zhejiang provinces - both major lithium production hubs - also lent support to prices. "Lithium prices will stabilise only when supply growth matches demand growth," Xu said.
Meanwhile, the global cobalt market could see a bigger surplus of 8,000 tonnes in 2022, compared to a 2,000-tonne overhang in 2021, Antaike data showed.
Weak demand will pressure cobalt prices in both Chinese and ex-China markets, said Antaike analyst Liu Yimin.
China's lithium carbonate battery grade spot price has had a spectacular run Global nickel market balance Cobalt prices could fall further as the global market might face bigger surplus in 2022
(Reporting by Siyi Liu in Dezhou, China and Mai Nguyen in Hanoi; editing by David Evans)
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