[SMM analysis] can the return of battery nickel sulfate premium to primary nickel (bean) premium stimulate the reuse of nickel bean / powder production in precursor factories?

SMM, 18 Sept.

(note: unless otherwise specified, the nickel sulfate mentioned in this article refers to battery grade nickel sulfate)

Since the beginning of September, the sticking range of battery-grade nickel sulfate has gradually narrowed compared with that of first-grade nickel (bean). According to SMM data, battery-grade nickel sulfate has been converted to water again on September 18, with a water increase of 4475 yuan / metal ton.

Battery grade nickel sulfate premium to primary nickel (bean)

Profit margin of nickel sulfate production of raw material on the same day

The reason is that the supply and demand of nickel sulfate has improved. On the supply side, national production of nickel sulfate (including battery grade and electroplating grade) fell month-on-month in September. SMM preliminary statistics may be reduced by 5.48% to 42400 tons in kind, equivalent to 9335 tons of metal. On the one hand, the prices of battery grade nickel sulfate and pure nickel have been hung upside down for several months, and the profit level of producing pure nickel is relatively high, and many nickel sulfate plants with pure nickel production lines have converted to pure nickel; on the other hand, whether it is nickel sulfate producers using intermediate products or precursors producing nickel beans / powder autolysis, they have been in a state of loss in the past two months, and the manufacturers who have cut production before have not had the incentive to resume production significantly.

On the demand side, although downstream power battery demand grew less than expected, it has maintained a slow recovery since August, coupled with the performance of the digital ternary and small power markets, precursor production has increased significantly, rising 14% in August from the previous month. Demand in September still maintained steady growth, resulting in a significant increase in demand for nickel sulfate.

Can the return of battery nickel sulfate premium to primary nickel (bean) premium stimulate the reuse of nickel bean / powder production in precursor factories?

When the premium of battery grade nickel sulfate to first grade nickel (bean) is 10000 yuan / metal ton, it can cover the processing fee of nickel bean / powder to form liquid nickel sulfate (according to SMM research, the processing fee is about 7000-10000 yuan / metal ton). The precursor factory will have the power to use nickel bean / powder production.

Although nickel sulfate production remains low, the nickel sulfate inventory balance from June to August shows a cumulative stock of 1262 metal tons, while the downstream demand growth rate may be limited, as the ternary battery industry is not only affected by the subsidised slope, it is also faced with the squeeze of lithium iron phosphate batteries, and the inventory is not expected to be fully digested in September. Therefore, SMM believes that in the case of improved supply and demand pattern, battery grade nickel sulfate in September compared with grade I nickel (bean) premium may continue to return, but it is difficult to return to 10000 yuan / metal ton, precursor plants are still more inclined to purchase nickel sulfate directly in a short period of time.

Monthly balance of supply and demand of Nickel Sulfate in China

Premium and supply-demand balance of battery grade nickel sulfate over primary nickel sulfate

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