China’s Surprising Increase in Nickel Production and the Graphite Challenge

China has caught the critical minerals industry off guard with its rapid ramp-up of nickel production from Indonesia, according to William Adams, head of battery research at Fastmarkets. Speaking at the 15th Lithium Supply and Battery Raw Materials 2023 conference, Adams highlighted the decline in nickel prices, partly attributed to a slowdown in electric vehicle (EV) sales in Europe. He noted that European EV manufacturers prefer batteries with higher nickel content, and China’s partnership with nickel miners in Indonesia has contributed to the recent increase in supply. Despite the challenges posed by COVID-19, China has managed to push forward and introduce new nickel supply to the market, defying expectations of delays.

Adams also drew attention to the under-covered metal in the critical minerals space, which he identified as graphite. China currently dominates graphite processing and production, raising concerns over supply diversification. To address this issue, Adams emphasized the need for greater diversification of graphite supply sources.