[Conference Takeaway] China International Nickel Manganese Industry Chain Development Forum

SHANGHAI, Jul 22 (SMM) - The 7th China International New Energy Conference 2022, hosted by the SMM (Shanghai Metals Market), has come to a successful end last week. Over 2,000 industry experts and guests participated in the conference, and people provided their perspectives on a variety of topics regarding the most recent trends in the new energy industry, including new energy batteries and their materials, power battery recycling, new energy equipment, and technologies as well as international new energy industry chain.

Speech topic: Global manganese price forecast 2022-2026E

Speaker: Yu Xiaodan, SMM Industry Analyst

South Africa's manganese ore reserves are rich and the production is increasing

1) The reserves of surface manganese ore resources are abundant, but the distribution is uneven. In some countries, the grade of manganese ore is very low, hence the mining cost is very high.

2) Manganese ore production in South Africa is relatively high and may increase further. While China's long-term manganese ore output is relatively stable after experiencing a gradual reduction.

3) By the end of 2021, the world's total manganese ore reserves stood at about 1.5 billion mt. South Africa ranked first, accounting for 43% of the global manganese ore reserves. The grade of manganese ore in China is relatively low, and the reserves only account for 4% of the world's total.

The grade of manganese ore in China is low with manganese carbonate ore being the major ore type

1) With years of mining and consumption, the grade of domestic manganese ore declines. At present, the grade of manganese oxide ore is about 25%, and the grade of manganese carbonate ore is about 12%.

2) Due to the environmental inspections and safety regulations toward small and unqualified mines, the normal production is affected. In addition, domestic manganese oxide ore has little cost advantage as the imported manganese ore supply is sufficient and the quality is stable.

Speech topic: Stainless steel raw material market and analysis of supply and demand

Speaker: He Siyao, SMM Stainless Steel Industry Analyst

Prices trend of stainless steel

Stainless steel prices began to rise since July 2021. As the industry has relatively matured, there are both new capacity and eliminated capacity. In addition, the raw material prices are high and the market sentiment is optimistic. Therefore, the stainless steel prices continue to rise. Due to the impact of the pandemic in 2022, the overall performance of the industry was poor, and the prices declined.

Raw material - Stainless steel scrap

Encouraged by the target of carbon neutrality, the import of stainless steel scrap has gradually resumed since September 2021. The domestic market has gradually increased the proportion of stainless steel scrap. At present, the stainless steel scrap is most widely used in the production and application of 304 stainless steel.

The production of high-grade nickel matte may affect the supply pattern of nickel-based raw materials

Some of the high-grade nickel matte production can be converted from the NPI production line. Will it affects the supply surplus of Indonesia NPI?

At present, from the perspective of energy consumption and environmental protection, the process of oxygen-enriched side-blowing is better than the process of converting high-grade NPI to high-grade nickel matte. Therefore, although the short-term Indonesia NPI supply will be affected by the conversion to high-grade nickel matte production, the long-term supply surplus will remain.

Speech topic: Global nickel industry development and price forecast 2022-2026

Speaker: Wang Cong, Director of SMM Big Data

At the beginning of 2022, the nickel prices fluctuated abnormally. Due to the mismatch of the nickel futures and the spot prices, the pricing of the spot market was chaotic. In this case, the transactions became more difficult. The NPI prices were in deep discounts over the pure nickel prices as the supply continued to increase. At the same time, the premiums of nickel salt prices over the pure nickel price reserved to discounts. The cost efficiency of nickel briquette continued to decline.

The NPI supply is in surplus and the support for nickel prices from the cost has weakened. As Indonesia's capacity released rapidly since 2020, the profits of domestic enterprises are squeezed. However, with the development of the market, the global pattern will gradually stabilise from 2025 to 2026. At the same time, the cost advantage of Indonesian NPI is obvious when it is surplus, which will gradually take over the domestic market.

The PCAM output still increases rapidly, and the increment is mainly contributed by China. At the same time, the transition to high-nickel production accelerates, and the nickel consumption per tonne of precursors continues to increase.

SMM believes that the supply pattern of nickel salts will reverse in the second half of 2022, and sufficient raw materials will lower the prices. The supply of nickel sulphate will gradually be in surplus. According to SMM research, from 2021 to 2023, a number of intermediate product projects will be put into production.

The import of raw materials for primary nickel salt will continue to increase in 2022, and the proportion of high-grade nickel matte will increase. According to the data, the consumption of primary nickel salt has increased by 109% on the year, and the use of pure nickel has almost halved when compared with 2021.

In terms of the global nickel market, the portfolio pure nickel downstream varieties will stabilise after 2022. According to the supply and demand balance of nickel, the nickel has been oversupplied since April 2022, and SMM predicts that the supply will further increase in the third and fourth quarter of 2022. The global nickel supply will also be in surplus.

Speech topic: Differentiated development path of nickel and manganese salts amid the transition to high-nickel NMC battery

Speaker: Zhang Lingying, Senior Analyst of SMM Nickel Market Industry

From March 2022, the prices of nickel sulphate and manganese sulphate were at a low level. However, with the support of national policies and the development of downstream sectors, the prices gradually rose. Due to the mismatch between supply and demand, the prices rose even more sharply.

The capacity and production of manganese sulphate is mainly distributed in Guangxi and Guizhou provinces, while that of nickel sulphate is mainly found in Gansu, Guangdong, Zhejiang, Hubei, and Hunan. The growth rates of nickel and manganese do not really match.

Under the transition to high-nickel NMC battery, the consumption of nickel and manganese gradually diverges.

In terms of nickel, according to SMM data, from 2021 to 2025, major leading enterprises will invest and construct a number of high-grade nickel matte projects and production lines. The capacity and output of intermediate products will increase sharply, and China is still the main importer of overseas intermediate products.

Battery-grade nickel sulphate production is gradually taken over by integrated manufacturers and toll manufacturers due to the competition for the raw materials and capacity mismatches. However, the battery-grade manganese sulphate market does not show a similar such trend as it takes up a small proportion it the total cost.

Raw materials of nickel sulphate are diversified. The prices of nickel salt declined amid the competition between raw materials. As the cost efficiency of nickel briquette fell significantly since 2022, the consumption of MHP and high-grade nickel matte increased significantly since Q2.

In terms of manganese, according to SMM statistics of China's EMM supply from 2017 to 2026, the EMM supply in 2022 is lower than expected. In the future, manganese oxide will mostly rely on imports and the main downstream is silicon-manganese alloy market, which has extremely low consumption of battery-grade manganese sulphate.

Nickel sulphate and manganese sulphate are expected to be in surplus in 2023-2024. The market competition gradually sharpens, and the supply of nickel salt-oriented raw materials will rapidly increase. Driven by the profits, with more new capacity of manganese sulphate entering the market, profits of raw materials will be squeezed.

Speech topic: Analysis of the development pattern of Indonesian nickel industry

Speaker: Du Mi, Former Vice Chairman of Indonesian Chinese Chamber of Commerce

The impact of the pandemic on the Indonesian nickel industry

Impact on the costs of products: Due to the impact of the COVID, many projects purchased expensive medical equipment for pandemic prevention. At the same time, employees who continued to stay behind were paid with a subsidy of 100 yuan/day. In addition, the domestic prices were adjusted. Therefore, the cost of Indonesian nickel was high.

Impact on new foreign trade: The impact of the pandemic eased. As of September 2021, Indonesia imported a total of 274 million vaccines, of which 215 million were imported from China, accounting for 20% of China's total vaccine exports. The import of the vaccines played a crucial role in the pandemic control.

Domestic trade of Indonesian nickel ore and export prices of nickel products

The export reference prices of Indonesian nickel products continued to rise with the soaring prices of raw ore and energy. Among them, the prices of NPI rose from the lowest point of 525 yuan/mtu to 1,352 yuan/mtu, and the high-grade nickel matte prices added from 555 yuan/mtu to 1,575 yuan/mtu, and MHP rose from 527 yuan/mtu to 787 yuan/mtu in the short term. (The price is calculated by dividing the total export amount by the export volume, for reference only).

Prospects of the Indonesian nickel industry policy

As of June 2022, there are 75 Chinese and foreign enterprises officially announced to invest in the Indonesian nickel industry, including about 54 wholly Chinese-owned or joint ventures. The plan includes about 280 RKEF production lines, about 440,000 mt of high-grade nickel matte capacity and about 380,000 mt of MHP capacity in Ni content. The capacity of Chinese-funded enterprises accounts for about 85% of the total, and the demand for nickel ore is far higher than that of local enterprises.

Speech topic: Changes in the LMO Market

Speaker: Li Hui, Secretary General of the National EMD Innovation Committee

Changes in the output of LMO and the pattern of production enterprises

According to statistics, the domestic output of LMO stood at 106,600 mt in 2021, a year-on-year increase of 14.8%. Affected by the rapid rise in raw material prices in 2021, the LMO prices increase. The main terminals are low-end electronics and two-wheeled vehicles, which are highly sensitive to the prices. As the demand was lower than expected in the first half of 2022 due to high LMO prices, the output increased only slightly.

The development trend of the LMO market

In 2021, the overall cathode active material market managed to grow rapidly. The prices of LFP, NMC, LCO, and LMO materials increased by more than 30% for several reasons.

1) The rapid growth of new energy vehicles led to the rapid growth of LFP materials and NMC materials.

2) The market demand for LCO batteries and related materials increased due to the strong demand for tablets, laptops, 5G mobile phone exchange, TWS, smart wear and other terminals.

3) The consumption of two-wheeled EVs for private use increased amid the implement of new national standard, which promoted the demand for LMO materials.

4) As Japanese and Korean lithium battery companies withdrew from the Chinese power tool market, Chinese cylindrical lithium battery companies took over their market share, promoting the increase in demand for NMC materials.

5) The drastic growth of the global demand for lithium batteries led to surging demand for cathode active materials. The expansion of cathode active materials capacity in China was faster than that of overseas enterprises. Chinese cathode active material enterprises further increased their global market share with their scale advantages.

Speech topic: Overview and outlook of manganese market

Liu Yinzhi, Eternal Tsingshan Group analyst

Manganese product

Consumption: 20 million mt

Metallurgical-grade manganese product: ferromanganese, silicon-manganese alloy, aluminium-manganese alloy - deoxidizer

Manganese products used in the battery and chemical industry: manganese dioxide, EMM, manganese dioxide and manganese sulphate - additive

Influencing factors: energy consumption and environmental protection requirements

New trend

The output cut target of crude steel was fulfilled in 2021 and the output will further decline in 2022.

By 20025, more than 80% of capacity will finish the ultra-low emission transformation. At the end of the "14th Five-Year Plan", the crude steel market concentration rate of the top ten enterprises may reach 60%.

EMM

Acid leaching method - manganese salt - EMM; high purity;

Hardness: stainless steel, aluminium-manganese alloy, copper-manganese alloy;

Additives: chemical industry, environmental protection, food hygiene, welding industry, aerospace industry and other fields.

Speech topic: Special membrane technology helps new energy materials industry save energy and reduce consumption

Speaker: Qiu Quanguo, General Manager of Sichuan Lvwo Innovative Environmental Protection Engineering Co., Ltd.  

Make the industry cleaner and the environment better. Become the leader of environmental governance and ecological cycle. Strive for customer service, innovation and progress, integrity and responsibility, and win-win cooperation.

Core technical

• Anti-pollution special separation membrane
• Segmented pressurized continuous filtration technology
• Continuous high-efficiency solid-liquid separation technology
• Acid-base separation special membrane technology
• High-efficiency electro-adsorption separation technology
• Continuous ion membrane desalination technology

Recovering NMC and lithium carbonate from power battery scrap

In recent years, energy-saving as well as new energy vehicles and power tools, electric bicycles, new energy storage, etc. have become the key fields of national investment and development orientations. Power batteries, energy storage systems, etc. should be scrapped for resource recycling after normal service life. The recycling of power battery materials will apply separation and conversion technology to produce ultra clean new energy batteries. Recycled products includes battery-grade nickel sulphate and battery-grade lithium carbonate.

Advantages of special separation membrane integrated extraction and recycle process

• The application of membrane technology realizes the grading and recycling of valuable metals.
• The process is efficient and simple, and the total recovery rate of valuable metals is high.
• The application of membrane concentration technology can greatly improve the salt concentration and save energy.

Speech topic: How can pyrometallurgical nickel smelting make breakthrough in the context of carbon neutrality

Speaker: Gao Chengjun, founder and CEO of Rongzhi Nonferrous Metals

Change external environment of nickel smelting

Western countries

• Several countries including the UK, US, Japan and South Korea have officially announced to stop financing overseas coal energy projects.

The world's largest nickel consumer - China

• “Carbon peaking and neutrality”

• On September 21, 2021, President Xi Jinping attended the general debate of the 76th UN General Assembly, and delivered an important speech entitled To Enhance Confidence, Overcome the Difficulties and Build a Better World Together and said that China will firmly facilitate the development of green and low-carbon energy in developing countries and will no longer build new overseas coal-based power projects.

Country with the most nickel resources - Indonesia

• No more approvals for new thermal power projects from 2023 • Proposed tax on nickel products with nickel content less than 70%

The largest producer - Tsingshan Group

• In March 2021, Tsingshan Group officially started to invest in the construction of a clean energy base. The project plans to build power stations and supporting facilities including solar and wind energy in Indonesia's Qingshan Park and Weidabe Park. Tsingshan Group decided to invest in the construction of a 2000MW clean energy base in Indonesia in the next 3 to 5 years to provide power guarantee for green development. The electricity it produces will be mainly used to produce raw materials for new energy electric vehicle batteries.

Speech topic: Nickel and the sustainable battery value chain

Speaker: Dr. Mark Mistry, Senior Public Policy Manager, Nickel Institute

According to Dr. Mark Mistry, sustainable development is the path to achieving long-term goals, and what is don to achieve sustainability and the assessment method of sustainability is critical to the battery industry.

These basic principles need to be kept in mind when it comes to the requirements of the sustainable EV value chain. Electric vehicle batteries are critical to green and sustainable transportation because they can help reduce greenhouse gas emissions and reduce the carbon footprint.

New battery regulation framework

For the first time, the battery regulation covers the entire life cycle of batteries, and great importance is attached to the initial stages of battery production, namely mining, processing and battery manufacturing.

More importantly, the members of the Global Battery Alliance are not limited to European countries. Stakeholders from Asia, Europe, South and North America and Africa all take an active involvement.

The new bill covers four chapters, all related to raw material manufacturers, or to be more precise, nickel manufacturers.

Nickel and sustainability

In accordance with the requirements of due diligence and responsible resource development, we should pin and manage the ESG risks involved in the value chain of electric vehicle batteries.

First, a plan for calculating the battery footprint needs to be created. Secondly, we need to calculate the carbon footprint during the nickel production, and especially the carbon footprint of the nickel used to produce the battery. We must abide by the above-mentioned international standards when doing calculating. Thirdly, it is critical to recover and recycle renewable materials and certain materials.

Calculating the carbon footprint of batteries

There is a project in Europe called the Product Environmental Footprint Category Rules for Batteries. The European Commission relied on this project to come up with a method to collect data and calculate carbon footprint, which should be consistent with the requirements of the EU battery regulation and those of the Global Battery Alliance.

Speech topic: Sichuan Shunning’s integrated project of ternary precursor

Speaker: Dan Yong of Sichuan Shunying Power Battery Material Co., Ltd.

Sichuan Shunying is mainly engaged in the business of precursor for power lithium battery. Specifically, it focuses on the research and development, production and sales of energy storage materials such as the hydrometallurgy energy storage materials, the synthesis of functional materials, and the recovery and recycling of battery scraps. The high-pressure acid leaching technology of limonite-type laterite nickel ore, the company’s core technology, is at an international advanced level. At present, Sichuan Shunying boasts of many projects under construction, including a NMC cathode material precursor project with an annual production capacity of 150,000 mt, a laterite nickel ore project with an annual production capacity of 10,000 mt, a Shunying research institute project, a high-purity scandium oxide powder project with an annual production capacity of 300 mt, and a recycling project with an annual processing capacity of 60,000 mt ternary acthode power batteries

Speech topic: Status quo and key technologies of high-pressure acid leaching process of laterite nickel ore

Speaker: Ma Baozhong, professor of University of Science and Technology Beijing 

As an important strategic metal, nickel is mainly used in manufacturing stainless steel but is also increasingly used in the battery field. Cobalt, also an important metal, accounts for a larger share in battery applications than nickel - about 80% of cobalt is used to manufacture battery materials.

The nickel resources used are trending higher year by year both in China and the rest of the world. Nickel resources can be divided into nickel oxide ore and nickel sulphide ore. Nickel oxide ore, also known as laterite nickel ore, is a typical co-associated resource of nickel and cobalt. The laterite nickel ore has unique mineral characteristics. At present, there are two technologies to process it, the high-pressure sulfuric acid leaching technology and a new technology of high-pressure nitric acid leaching.

Speech topic: Sustainable response to the challenges of growing nickel demand

Speaker: Evgeny Semakin, a metals market regional analyst from Norilsk Nickel

Norilsk Nickel, the world's largest low-carbon primary metal supplier and also one of the lowest-carbon-footprint-producing companies in the industry, has a strong product lineup to reach a long-term target of 80,000-100,000 Ni in the battery sector. Not only are the company's products widely used in the battery industry, it has also established quality standards for nickel sulphate and cobalt sulphate, which are well recognized by leading battery materials companies.