[SMM Analysis] Chinese Buyer's Purchase Willingness Strengthened, Changes in South Korea's Nickel Sulphate Export Market Were Worth Noting.

In early August, SMM newly launched the SMM battery-grade nickel sulphate CIF China price to more directly reflect actual transactions after battery-grade nickel sulphate from outside China entered the Chinese market. Against the backdrop of no clear recovery in South Korea’s demand for ternary cathode material, China remained an important export market for some South Korean nickel sulphate suppliers. Based on this, SMM, in combination with market feedback after the new price release, summarised recent changes in transactions between South Korean suppliers and Chinese buyers.
Since mid-August, the SMM battery-grade nickel sulphate CIF China price generally held around $3,700/wmt. It was reported at $3,740.29/wmt on August 14, pulled back slightly to $3,706.52/wmt on August 21, and rebounded to $3,716.07/wmt on August 28. Overall, price fluctuations were relatively limited. However, market surveys showed that after entering late August, Chinese buyers’ purchase enquiries for South Korean nickel sulphate clearly became more active.

Chinese Buyers’ Purchase Willingness Further Strengthened in Late August

According to the SMM survey, Chinese buyers’ purchase enquiries for South Korean nickel sulphate had continued to appear in mid-August, and after entering late August, purchasing actions further became more proactive. More Chinese buyers began to proactively ask suppliers about supply and related transaction terms.
Some South Korean suppliers said that Chinese buyers’ engagement in purchase negotiations had increased recently. Compared with simply asking for quotes, more and more enquiries began to focus on actual deliverable supply, indicating that buyers’ willingness to lock in raw material supply had strengthened.
However, the recent changes should not be simply interpreted as a clear rise in South Korean nickel sulphate prices. More noteworthy is that Chinese buyers’ purchasing activity and market participation are increasing. As actual transaction terms are still affected by factors such as the LME nickel prices pricing cycle and contract structure, current market changes were reflected more in the rise in enquiry and negotiation activity, rather than a clear lift in any single price level.

Stronger Purchasing Activity Has Not Yet Confirmed a Clear Recovery in End-Use Demand

Although Chinese buyers’ purchase willingness strengthened, South Korean suppliers remained cautious about interpreting this as a broad recovery across the ternary battery industry chain.
Over the past few years, China’s nickel sulphate capacity expanded significantly. Even if precursor and cathode material production recovered, uncertainty remained as to whether demand growth could fully absorb existing supply capability. Meanwhile, the operating rate of South Korean precursor and high-nickel cathode enterprises has not yet shown a clear improvement.
In addition, there usually was a certain time lag from contract negotiations to final entry into the Chinese market for South Korean nickel sulphate. Therefore, whether the current increase in inquiries from Chinese buyers corresponded to short-term production needs or more reflected advance planning for future raw material supply remained to be further observed.
Therefore, it was more appropriate to summarize the current market status as:Chinese buyers' procurement sentiment was improving, but the synchronous recovery of downstream actual demand had not yet been clearly confirmed.

Short-term trading sentiment improved, but its sustainability still depended on the recovery of downstream demand

In late August, inquiries from Chinese buyers increased, and it was expected to provide certain support to the trading sentiment of the South Korean nickel sulphate export market to China in the short term. If Chinese buyers continued to actively seek raw materials, the trading activity in the CIF Chinese market might also further increase.
However, supply pressure in the Chinese nickel sulphate market still existed, and the recovery of demand for South Korean precursors and ternary cathode materials remained limited; these factors might continue to limit the upside room for prices. Based solely on the recent rebound in procurement activities, it was currently not enough to determine that the market had entered a structural recovery phase.
The subsequent trend of the South Korean nickel sulphate export market would still mainly depend on whether current inquiries could be converted into sustained transactions and actual raw material consumption, and whether more clear recovery could occur in the production of precursors and cathode materials in both China and South Korea. At this stage, compared with prices themselves,changes in Chinese buyers' procurement behavior were more worthy of attention.