[SMM analysis] the proportion of primary nickel used in the production of nickel sulfate from nickel bean / nickel powder production in the precursor plant will be reduced to 0%?

SMM, July 12 / PRNewswire-Asianet /-

New energy subsidies slow down the growth of nickel sulfate production

Nickel Sulfate production in China from January 2018 to June 2019

From January to June 2019, China's total production of nickel sulfate was 62600 metal tons, up 27 per cent from a year earlier and 26 per cent from the second half of 2018. The new energy vehicle industry has subsidised the retreat, with precursor companies slashing production plans because of falling orders and reducing purchases of nickel sulfate, the raw material. Since June, battery-grade nickel sulfate enterprises have feedback sales are not moving, the plant has gradually accumulated inventory. As the overall demand for the third quarter is more pessimistic, many enterprises choose to cut production or switch to electrolytic nickel. SMM expects nickel sulfate production to be 63000 metal tons in the second half of 2019, a limited increase from the first half of the year, with a 27 per cent increase in nickel sulfate production for the whole year.

The price of nickel rose sharply and the price of nickel sulfate continued to decline, and the production profit margin of enterprises decreased.

Premium of battery grade nickel sulfate to grade I nickel (bean)

National average profit margin for nickel sulfate production (raw materials of the day)

In addition, nickel prices have risen sharply recently, while nickel sulfate sales difficulties have led to continued price decline, and the premium of battery-grade nickel sulfate over nickel beans has narrowed to 1959 yuan per metal ton on July 11. precursor integrated enterprises use nickel beans to produce liquid nickel sulfate losses. According to the SMM cost model, the average profit of national nickel sulfate raw materials on the same day, the profit margin of crystal nickel sulfate produced by MHP (nickel cobalt hydroxide) was 2% on July 11, while the profit margin of precursor enterprises using nickel beans to produce liquid nickel sulfate was-5.7%.

Reduction in the use of nickel beans in the production of nickel sulfate what is the reduction in the demand for first-grade nickel in the new energy industry?

According to SMM's statistics of 27 samples, the proportion of nickel sulfate produced from nickel beans in June was 23 per cent. If nickel bean production continues to lose money, the precursor enterprises may suspend their integrated production lines, that is, the new energy industry will reduce the demand for primary nickel by up to 14000 metal tons in the second half of the year. However, considering that some enterprises have signed long-term associations or have some stocks, or that the nickel sulfate premium to nickel beans has returned to above 10, 000 yuan / metal ton in the second half of the year, the actual consumption reduction of grade I nickel will be much less than 14000 metal tons.

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