84% of pension funds expect nickel to increase in price as demand for lithium-ion batteries rises

Eighty-four per cent of European pension funds believe that the price of nickel will increase over the long term, as the demand for lithium-ion batteries and the rollout of electric vehicles intensifies.

The survey of 105 pension funds with combined assets under management of USD 213bn, was conducted by Global Palladium Fund (GPF), a provider of industrial and precious metal exchange-traded commodities (ETCs).

Its survey revealed that a bullish outlook means that 45 per cent of funds are looking to increase their allocation to nickel compared to 27 per cent who expect to reduce it.

Known for its attractive properties in the steel industry, nickel has come into its own over the last few years, in a large part due to demand from the electric battery sector. In 2020, the industry accounted for around 6 per cent of global demand for nickel, but this is expected to rise to 36 per cent by 2030, according to Roskill. Only around 30 per cent of annual nickel mine supply is high-grade nickel and can be used in the electric battery industry.

GPF chief executive officer, Alexander Stoyanov, said: “One of the key attractions of physical nickel is that it provides investors direct exposure to electrification and the zero-carbon transition themes.”

In terms of the outlook for nickel, over 50 per cent of pension funds expect it to end the year up over 12 per cent from mid-April. Some 11 per cent anticipate it will be up to 6 per cent higher by the end of this year when compared to its price in mid-April and 33 per cent think it will be between 6 per cent and 12 per cent higher.

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