Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Australia-headquartered BHP has signed a nickel supply agreement with Tesla Inc. BHP will ship material from its Nickel West asset in Western Australia. 


Nickel West is known for being one of the lowest carbon-emitting nickel producers in the world. Tesla, the largest electric vehicle manufacturer and battery storage system, is focused on accelerating its transition to sustainable energy. Nickel is a key metal in Tesla’s battery. 


The supply agreement between BHP and Tesla would make the battery supply chain more sustainable and focus on end-to-end raw material traceability using blockchain and technical exchange for battery raw materials production. 


Nickel demand for batteries is expected to increase by over 500pc in the next 10 years, driven by rising demand for electric vehicles as we move towards a more sustainable and carbon-neutral era, says BHP.


BHP released annual results on July 20 and reported nickel production at 89,000mt, 11pc higher than the previous fiscal. Nickel production guidance for FY22 is expected at 85,000-95,000mt.


Nickel prices on the LME are hovering around $18,386/mt as of July 21. According to BHP’s forecast, nickel demand would support prices in the long term. Year-to-date, nickel prices are up by 6pc. In March, the contract reached the lowest level this year at around $15,951/mt and has since recovered by 15pc. 

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