Firstly, global NPI capacity and output, which show a gradual increasing trend in the future. Although，in the past，Indonesia had restrictive new production lines, but for declared production lines can be continue. Second, although NPI balance expected to be in a large surplus, the actual surplus may not be as large as expected, the main reason is that when a commodity is excess, the company will Slowdown the production. Therefore, the declared production line may be postponed to 2024-2026, resulting in a continuous increase in NPI production capacity.
We will also find that China's NPI production still shows a downward trend its becacuse Indonesia's NPI cost advantage.
Next page is intermediate，affected by the growth in demand, intermediate 's capacity and output expected to rise. For example, we all know that the downstream for MHP and high nickel matte is nickel sulfate, and the 22-year nickel sulfate production capacity is 750,000(seven hundred and fifty thousand) tons, but the actual production is more than 400,000( four hundred thousand) tons, the reason is the raw materials is sacarce, In this period, many companies start to building intermediate production lines in Indonesia in 2022.
But we can see that the global production of high nickel matte is lower than MHP. Although the both can be used for nickel sulfate production. However, according to the production line of each company, the acceptance of MHP more high.
1. The production time of high nickel matte is short, but the production cost is high
2. high grade nickel matte have high requirements for the grade of nickel ore
Althoug high nickel matte has some disadvantages compared to MHP，but, the production of high nickel matte will increase in the future。
From 2021, the process of RKEF to high nickel matte is opened up. Beginning in 2022, the high nickel matte converted by NPI show a large increase. So, where does the driving force come from? For this question, we can also understand that if the profit margin of production high nickel matte l is greater than selling NPI, we think that NPI has the power produce to high nickel matte.
2023 for example, the profits of high nickel matte from January to August are greater than NPI, but after August, due to the rise in nickel ore prices, the price difference between high nickel matte and NPI narrowed, so at this stage, the production of NPI showed an upward trend, while the production of high nickel matte was the opposite.
In addition to profits, downstream demand also important, that is, stainless steel, nickel sulfate, and refined nickel. When demand decreases, the profit margin of nickel sulfate and Refined nickel narrows, resulting in a decrease in the production of high nickel matte.
Downstream demand is so important for supply. What will be the future performance of stainless steel, refined nickel, and nickel sulfate?
For stainless steel, the global 300 series shows a continuous growth trend, mainly because 300 series continues to have new production, second, in the future, it is expected that the production capacity of 200 series will be replaced by 300 series, mainly due to consumption upgrades.
For raw materials of stainless steel, the raw materials of 300 series are still concentrated in NPI, and show an upward trend in the future. Refined nickel, Feni and scrap will continue to decline in the future. The main reason is that due to the large surplus of NPI, NPI production of stainless steel is more economical than other raw materials
For nickel sulfate， we will find that nickel sulfate show a production increase and rapid expansion of capacity in the future,Last year, due to the rapid expansion of ternary and the extreme market of refined nickel，which led nickel sulfate to be shortage。Therefore, some companies begun to build their own nickel sulfate production lines to meet the needs, so we will find that the capacity of nickel sulfate in 2022 and 2023 shows a rapid expansion. However, it is worth noting that if there is a problem with the production line or downturn in demand, the nickel sulfate production expectation may change.
In terms of global nickel sulfate production by region, China is still the main force of nickel sulfate production. Because the demand for nickel sulfate comes from China. Therefore, most of the overseas nickel sulfate is also exported to China. Secondly, the raw materials of overseas nickel sulfate production lines still use nickel beans, so nickel sulfate produced in China also has some advantages on the cost side. the expected proportion of nickel sulfate raw materials used in the future. We will find that in the future, the proportion of nickel sulfate will still focus on MHP.
The future ternary direction is the main reason for the increase of nickel sulfate production。the demand for ternary batteries is still strong, and the demand for nickel is rising, but the demand for cobalt is showing a downward trend. So, the future ternary precursor will follow high nickel low cobalt trend.
Similar to nickel sulfate, after 2022, we can see the global refined nickel capacity and output has an increase in production. That’s because 2 years ago extreme market led refined nickel prices is overvalued Affected by this, lot of China Company began to resume refined nickel production. At the same time, driven by high profits, many domestic and overseas companies start to build new Electro-Deposited Nickel production lines。
In terms of raw materials, high nickel matte and MHP are the main raw materials for refined nickel in the future。
The rapid expansion of the alloy industry is the main reason for the increase in refined nickel production. For alloys, it can be divided into 6 categories。 the market share of superalloys is high as 76%。In addition, superalloys are also used in harsh environments, so the requirements for raw materials is high. According to our research, the proportion of Jinchuan refined nickel is 78%. the growth rate for the future alloy industry is expected to be 20%。
Next, we can look at the proportion of global nickel supply side and demand side。
The change in the proportion of global primary nickel is in order to reflect the variability of the demand。we can see that although the production of refined nickel is expected to increase, its share of primary nickel is declining, which means that the increase of refined nickel is much less than , NPI and nickel sulfate
For demand side， we will find that the current downstream proportion of global primary nickel is still dominated by stainless steel, because the main downstream of NPI is stainless steel. But we also find that the proportion of stainless steel will gradually narrow ，which means the growth rate of the stainless steel industry in the future will be slower than other industries, However, the new energy industry is supported by national policies, will continue to rise in the future.
Moreover, want to explore more business opportunities and meet key stakeholders in 2024? Come and join us at @Indonesia Critical Mineral Conference 2024 in Jakarta, Indonesia in June 11-13, 2024. Nickel, Cobalt, Coals, Aluminum, Bauxite, Tin, and NEV.
If you are interested, please visit the conference websites for more information.
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