I have read the interview and followed up with some additional reading.
This has already been factored into market.
The announcement of the potential supply of Class 1 Nickel being converted from Nickel pig iron > Matte coming out of Indonesia caused the Nickel price to momentarily drop in early 2021 from $US23,000/t - $US22,000/t
We are well past that now, stabilising around $US33,000/t
Market soon realised that while conversion of NPI to nickel matte introduces additional Class I nickel units into the market, it doesn’t increase the overall nickel supply.
Rather, it diverts nickel previously destined for the stainless steel market to the lithium ion battery market. New nickel projects will ultimately be required to meet the forecast increase in nickel demand.
Production of Class I nickel form NPI will incur additional capital and operating costs and will result in additional nickel losses compared to Class II direct production.
Conversion of NPI to nickel matte creates opportunity for NPI producers to diversify their production and take advantage of potential premiums in Class Inickel.
However, this opportunity comes at a cost –capital, operating and environmental.
In the end, the conversion of NPI does not address the overall nickel supply deficit that is looming.
It has the potential to address some of the EV battery demand issue;however, overall, the supply of nickel is not impacted.
Diverting NPI from the stainless steel stream has the potential for creating supply shortages in this market segment creating and situation where the margin on selling NPI exceeds to the margin of selling Class I nickel; at which point the NPI producer would revert production back to NPI.
In the end, the conversion of NPI to nickel matte may not matter to the market. EV battery markets may be satiated if additional supply cost and environmental issues can be addressed at the producer level, but overall, it does not amount to new supply.
(20min delay)