SHANGHAI, Nov 15 (SMM) – Nickel sulphate producers in China used a higher ratio of nickel briquette/powder in their feedstock in October, despite weakening demand for the battery material since June, as reduced prices of Wuxi nickel last month triggered the recovery of lines that produce with refined nickel. 

Last month, discounts of nickel on the Wuxi-based China Stainless Steel Exchange once deepened to 10,000 yuan/mt against Shanghai nickel prices. Spot nickel briquette in Wuxi also received heavy discounts. 

An SMM survey showed that the proportion of nickel briquette/powder in raw materials to produce nickel sulphate rebounded to 22% in October, from 16% in August-September.

Proportion of raw materials for producing nickel sulphate

National subsidy cuts for new energy vehicles, which took effect from June 25, slashed demand for nickel sulphate and cut prices of battery-grade nickel sulphate to discounts against nickel briquette/powder in July-September. This forced nickel sulphate producers, mostly ternary precursor mills, to scale back using refined nickel as feedstock. 

The price spread between battery-grade nickel sulphate and nickel briquette/powder were at highs above 10,000 yuan/mt, in metal content basis, in the first half of this year, bolstered by brisk downstream demand before NEV subsidy cuts. 

This saw the proportion of nickel briquette/powder in raw materials as high as 32% in April. 

While the premiums again slipped since mid-October, SMM expects the usage of nickel briquette/powder to stabilise in November-December as more production lines will come online. 

Premiums of battery-grade nickel sulphate against nickel briquette/powder

Ternary precursor mills account for the majority of the refined-nickel-using nickel sulphate producers as they take advantage of the nickel sulphate solution generated by dissolving nickel briquette/powder to directly produce ternary precursor.  

Scrap and intermediate products obtained by hydrometallurgical processing are another two essential raw materials for producing nickel sulphate. 

Limited availability and capacity of scrap and intermediate products, however, drove nickel sulphate producers to seek alternative refined nickel, despite its higher costs.