SHANGHAI, Jun 1 (SMM) – The persistent inversion of the price difference between nickel sulphate and refined nickel has stimulated the expansion of electrodeposition nickel capacity in the past two years, boosting the proportion of electrodeposition nickel in the world's total refined nickel capacity, with China being a major contributor. It is expected that 2023-2024 will see concentrated release of new electrodeposition nickel capacity.
Since the extreme event in nickel market last year, the spot prices of pure nickel have fluctuated at a high level for a long period of time. This drove a large number of domestic nickel salt enterprises to resume production of refined nickel since mid-June 2022. At the same time, driven by high profits, many domestic and overseas companies have started to build new electrodeposition nickel production lines from 2022.
New electrodeposition nickel capacity is forecast to account for 23% of China's total pure nickel capacity in 2023. New electrodeposition nickel capacity will continue to expand in 2024 and may account for 28% of China's total pure nickel capacity under conservative estimates. In addition, there are also new refined nickel projects overseas in 2023, but unlike domestic production lines, they are featured by large capacity in a single project and smaller number of enterprises. It is estimated that new electrodeposition nickel capacity will account for 9% of the global total pure nickel capacity in 2023, and the share is estimated to climb to 10% by 2024, mainly driven by China.
As falling nickel prices in February-March 2023 eroded the profit margins of electrodeposition nickel produced with MHP or nickel sulphate, some electrodeposition nickel producers delayed the commissioning of new production lines. However, it is worth noting that the profit margins of electrodeposition nickel produced with MHP or nickel sulphate are constantly changing. As such, once profit margins are restored, new electrodeposition nickel capacity that has been delayed will be put into operation.
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