27 April 2023 – Spanish stainless steel group Acerinox has published its Q1 2023 results. Very good numbers were rewarded with a rise in the Acerinox share price. And electromobility is booming. Growth forecasts revised significantly upwards. Is the availability in nickel still coming behind – it could be tight.
Right Mindset? Spanish stainless steel group reports very good results
Spanish stainless steel group Acerinox today published its results for the first quarter of 2023. The company’s share price has already risen by more than 4% in the meantime due to the good figures.
Significant increase compared to 2019
After a quick comparison of Q1 results from 2019 up to and including 2023, the group is in a much better position today compared to pre-pandemic times and was not only able to increase net sales by 48% compared to 2019 with lower melt store production, but also to lift net sales per ton by 74%.
This is an impressive result and particularly striking for us, as the Spanish stainless steel group Acerinox did not so much whine about EU subsidies, but apparently achieved a damn good result with the right mindset. That has to be acknowledged by the competition.
Rapid growth in electromobility – is nickel production lagging behind?
As Deutsche Bank currently reports, electromobility is experiencing a boom worldwide that is expected to continue in the coming years. According to the International Energy Agency (IEA), more than ten million electric cars were sold last year, which corresponds to a share of almost one in seven new cars. The momentum continued in the first quarter of 2023, when 2.3 million electric cars were sold worldwide – a 25 percent increase over the previous year.
Growth could accelerate even more
Forecasters predict that growth could accelerate further in the second half of the year, surpassing last year’s record by 35 percent to 14 million vehicles. By 2030, estimates suggest that more than 40 million electric cars could be sold annually – a figure that seems conservative and could be surpassed if states and companies tighten their climate targets to become carbon neutral by 2050.
Nickel most efficient in EV batteries.
As sales of electric vehicles increase, so will the demand for batteries and the raw materials used in them, such as nickel. Specific nickel demand will depend on battery technology, but in general, demand for Class 1 nickel is expected to increase because it can be used most efficiently in electric vehicle batteries.
Growth trend in batteries not to be offset by nickel production?
If this growth trend of 25 to 35% continues through 2023, which is currently assumed to be the case, nickel inventories are likely to become tight despite all forecasts. First, because there may not be as much Class I nickel available, and second, more producers may start converting Class II nickel matte to Class I nickel, which would affect availability in low-grade nickel products. This means either a close zero or a minus of up to 50,000 MT in terms of total global production in the projected production volumes for 2023.
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