China’s grip on the energy transition was strengthened this week with the listing of a small battery manufacturer controlled by Tsingshan Holding Group, a company that has already outperformed the best in the West.
Tsingshan: The Dominant Force in Nickel Industry
Tsingshan is the main shareholder in Batero Battery, which is a modest player in China’s rapidly growing electric vehicle battery market, ranking tenth among Chinese electric vehicle battery manufacturers.
Transforming the Nickel Industry
Over the past six years, Tsingshan’s technology has revolutionized the nickel industry, and this success may be an indication of what is planned for Batero, which raised $272 million from its listing in Hong Kong earlier this week.
Tsingshan’s Impact on Nickel Prices
Tsingshan controls nickel mines and refineries in Indonesia that dictate the price of the metal traditionally used in stainless steel production, but which is seeing increasing demand in the complex chemistry of batteries.
Breaking Nickel Prices
Not only has Tsingshan mastered the technology of extracting nickel from low-quality ore, but it has also built projects in Indonesia at competitive costs compared to Western competitors in a short timeframe instead of over many years.
Tsingshan’s Impact on Nickel Prices
As a result, Tsingshan is lowering nickel prices and pushing out higher-cost competitors. Over the past 12 months, nickel prices have fallen by 40% to $16,913 per ton. This decline has caused severe problems for Australian nickel mines, and more are expected to follow if prices continue to fall.
Challenges in the Nickel Industry
BHP, which has positioned nickel as one of its preferred metals, acknowledged the pressure it is facing in its operations in Australia. Jessica Farrell, Nickel West President at BHP, stated in an interview with the Australian Financial Review last week that it is challenging to remain globally competitive in a tough operating environment.
Transforming the Nickel Industry
Tsingshan’s ability to transform the nickel industry may be the main reason for interest in Batero Battery, which may currently rank tenth in the Chinese battery sector, but surely has ambitions for growth.
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