Nickel sulphate prices may stay high amid tight supply

The SMM battery-grade nickel sulphate index reached 26,348 yuan/mt on January 25, up 59 yuan/mt compared to January 18. Quotes of battery-grade nickel sulphate were 26,300-26,900 yuan/mt, up 200 yuan/mt from January 18. Nickel sulphate prices saw a slight increase last week. Nickel sulphate was most sold at discount coefficients of 98%-100% against the low-end SMM price, up from around 95-97% in the previous week. The main reason for higher discount coefficients is the difficulty in finding spot goods in the current market, but some downstream ternary precursor enterprises still have demand for nickel sulphate purchases. From the demand side, firstly, some ternary precursor enterprises experienced a marked surge in orders from abroad. Secondly, due to the upcoming Spring Festival, some ternary precursor enterprises are meeting February requirements early by replenishing essential stocks just before the holiday. Thirdly, during the Spring Festival, logistical issues will disrupt shipments, prompting some ternary precursor enterprises to accelerate their procurement of nickel sulphate. In summary, recent demand showed a clear rebound, but some of the recovery is due to cyclical factors. On the supply side, some nickel sulphate plants are suffering losses, leading to output cuts. Most nickel sulphate plants reported low stocks, and supply tightness worsened due to downstream stocking. On the raw material side, MHP discount coefficient has risen to 76-78%. In summary, both raw material and finished product prices are currently exhibiting a relatively strong trend. Looking ahead to this week, as the Spring Festival approaches, it is anticipated that inquiry and transaction activity may be lower. However, due to the impact of tight supply, nickel sulphate prices may temporarily stabilize, maintaining their current high levels.