On the morning of January 20, the main force of Shanghai Nickel rose by the daily limit, strongly breaking the $24000 / tonne mark for the first time in more than a decade and setting an all-time high. LME nickel has also hit a 10-year high, with LME nickel prices up nearly 17% again in less than three weeks so far this year. Industry insiders told the Financial Associated Press that high nickel and iron lithium are the two main directions of electric vehicles in the future. The main models of mainstream car companies in the international market are high-nickel routes. With the cost advantage of upstream raw materials of high-nickel ternary battery over lithium carbonate gradually highlighted, and the production capacity of overseas nickel and cobalt will be gradually restored and enhanced, the price competitive advantage of high-nickel ternary materials will be further revealed.
The demand for high nickel ternary materials is out of balance between supply and demand in the upstream and downstream.
Nickel is mainly used in the production of stainless steel and electric car batteries. Data show that stainless steel currently accounts for up to 68% of nickel demand, while batteries account for about 7%. The main applications of nickel in batteries are ternary lithium battery and Ni-MH / Ni-CD battery. Nickel inventories have been on a downward trend and there is a serious shortage on the supply side. Statistics show that in 2021, China imported about 3076389 physical tons of ferronickel (including nickel pig iron) from Indonesia, accounting for 24 percent of China's total nickel supply, and Indonesia is already the world's largest nickel supplier. LME nickel inventories have been on a downward trend since April 2021.
Downstream giants are in strong demand. According to industry reports, Tesla announced a meeting with Talon Metals Corp. on January 10. Sign the company's first nickel supply agreement in the United States. Under the agreement, Tesla will buy 75000 tons of nickel within six years, as well as cobalt and iron ore from Talon. In addition, industry analysts say nickel has performed well in previous Fed rate-raising cycles, and recent rare across-the-board interest rate cuts by the people's Bank of China have partly pushed nickel prices higher against a backdrop of ample capital in the domestic market.
According to a survey conducted by Rongbai Technology Company on January 11, high nickel ternary will enhance its competitive advantage in higher energy density, more cost-effective materials, as well as solid-state batteries and 4680 batteries. The competitive advantage is expected to increase significantly in 2023.
Chuang Chuang Securities believes that the outbreak of demand for high-nickel ternary materials is expected to become a major demand growth point for nickel within 5 years, and nickel is expected to become the next highly elastic lithium metal. In recent years, domestic enterprises have laid out Indonesian laterite nickel mine one after another, and the first-mover advantage is significant, and the production capacity will usher in a large-scale release period. It is estimated that the demand for nickel for power batteries is expected to reach 457300 tons by 2025, accounting for 19.34% of the total demand for nickel.
Relevant listed companies have expanded their production capacity one after another.
It is worth noting that Rongbai Technology, the leader of high nickel, recently won the order of Ning Wang. According to the agreement, Ningde Times expects to purchase about 100000 tons of high-nickel ternary cathode materials from the company in 2022. From 2023 to the end of 2025, Ningde era took Rongbai Technology as its first supplier of ternary cathode powder, and purchased no less than a certain proportion of high nickel ternary cathode materials from the company. In this regard, Rongbai Technology said in an institutional survey that from 2023 to 2025, as the first supplier of cathode powder, the company's supply share of high-nickel ternary cathode materials accounted for a considerable proportion of the total procurement in Ningde era. What we have signed with Ningde era is an omni-directional strategic cooperation agreement, not just a supply agreement. Due to the high nickel and terminal binding is relatively close, including technical cooperation and agreements can not be replaced at will, so the certainty of the order is relatively high. On January 4, Rongbai Technology's 2021 performance forecast showed that it is expected to realize a net profit of 890 million yuan to 920 million yuan, an increase of 317.71% and 331.79% over the same period last year.
Citic Futures told the Financial Associated Press that the current high prices have suppressed demand, coupled with the approach of the Spring Festival, demand for electrolytic nickel is seasonally weak. On the whole, in the short term, with the basic completion of downstream reserve demand, demand weakens seasonally, and nickel prices may become high and volatile. In the medium and long term, the macro negative effects may be repeated, but the consumption performance of new energy vehicles is strong, stainless steel production capacity increases, although the supply of nickel sulfate raw materials increases, but the gap is expected to expand, and the performance of nickel prices will remain strong.
Huayou cobalt and LG chemical joint venture to produce high nickel cathode has also become another hot focus of the market. A reporter from the Financial Associated Press learned from Huayou Cobalt that the company's cooperation with LG Chemical Korea is advancing as planned, and the 60, 000-ton nickel smelting project in Indonesia is expected to enter the performance release period in the second half of this year. Huayou cobalt industry announced in advance that it is expected that the net profit of returning home in 2021 will increase by 217.64% 260.56% compared with the same period last year. At the same time, a relevant source of the company told the Financial Associated Press that some of the production lines of the company's 60,000-ton nickel smelting project in Indonesia are currently in the stage of commissioning and trial production, and it will take some time for the project to reach production, and it is expected to enter the performance release period in the second half of this year.
Shengtun Mining disclosed in December last year that it plans to build a high nickel matte project with an annual production capacity of 40,000 tons of nickel. It should be noted that the high matte project of Youshan Nickel, a subsidiary of Shengtun Mining, is still in the nickel-iron stage. The person in charge of Shengtun Mining told the Financial Associated Press that the demand for high nickel matte is becoming obvious, but it has not yet ushered in explosive growth, in this case, the company can get a good profit from producing nickel and iron. However, the direction of new energy materials is determined, and the above high nickel projects can match the raw material supply of the 300000 tons of nickel sulfate project in Guizhou.
Chuang Chuang Securities pointed out that the output of laterite nickel ore accounts for 64%, and its development potential is huge, which is the main direction of nickel resources development in the future. According to the statistics of the Financial Associated Press, the relevant listed companies in Indonesia laterite nickel project, there are Huake High Ice Nickel Project (company: Huayou Cobalt Industry, Qingshan Group), Youshan High Ice Nickel Project (Shengtun Mining, Qingshan Group, Huayou Holdings), Huayue Wet process Project (Huayou Cobalt Industry, Luoyang Molybdenum Industry, Qingshan Group), etc., with an annual production capacity of 45000 tons, 34000 tons and 60, 000 tons, respectively.
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