Nickel Sulphate Prices Rose Amid Tight Supply

In February, the monthly average price for battery-grade nickel sulphate was 27,656.67 yuan/mt, up 1,165.76 yuan/mt MoM. The upward trend in nickel sulphate prices continued throughout February because of the unresolved supply and demand tensions at both the raw material and finished product levels. Nickel salt manufacturers, having largely completed proactive destocking in December, maintained a low finished product inventory based on sales. Precursor companies, after gradually completing their own destocking from January to February, accelerated the pace of stocking up on raw materials needed for production during the Chinese New Year period from late January. The mismatch in destocking rhythms between upstream and downstream contributed to the manifestation of supply and demand tensions. From the supply side, firstly, the impact of the Chinese New Year holiday led to a significant reduction in nickel sulphate supply due to salt manufacturers taking holidays or operating at low capacity; secondly, salt manufacturers primarily using recycled materials faced a slow recovery pace due to losses caused by high battery scrap price coefficients; thirdly, current finished product inventory in salt factories remains low, leading to overall tight supply. On the demand side, as companies completed their destocking, the overall material industry chain inventory is low, and improving car sales data can be promptly transmitted. The expected good car sales in March have led to a pickup in precursor orders for the month. Companies have also gradually begun to stock up on raw materials for March after the festival. Additionally, some companies have seen an increase in overseas orders in Q1, which has also increased downstream precursor demand for nickel sulphate. Overall, the combination of low supply and improving demand continued the supply-demand tension for nickel sulphate after the festival. Raw material price coefficients are at relatively high levels, providing strong cost support.

Entering March, some precursor companies still have a demand for nickel sulphate, but the supply increase is not keeping up with the increase in downstream demand, leading to continuous shortage of nickel sulphate. Coupled with the overall tightness of raw materials in Q2, and the current pace of price increases for finished products not matching the raw material side, some salt manufacturers are still experiencing losses, and the pace of resumption for hydrometallurgical recycling plants remains slow. With tight supply and solid cost, nickel sulphate price is expected to rise further. However, due to the high prices being difficult to pass on to downstream precursors, the upward space may be limited. In March, nickel sulphate prices are expected to rise slightly and then stabilize.

Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.