Nickel sulphate prices rose on supply chain concerns despite weak power battery demand

SHANGHAI, Apr 2 (SMM) – Prices of battery-grade nickel sulphate, a raw material used to produce electric vehicle batteries, halted their decline that lasted for much of March, and edged higher as of March 30, as concerns about feedstock supply disruption intensified after Papua New Guinea banned vessels at ports to stop the spread of the COVID-19.

The ban will delay the deliveries of intermediate products of nickel wet-processing metallurgy, raw material for nickel sulphate production, to China this month, and threaten to cause raw materials supply shortage in May. 

Customs data showed that over 50% of China’s imports of nickel wet-processing metallurgy intermediates came from Papua New Guinea in 2019, which is China’s major source of supply for such materials. 

SMM estimates reduced production of nickel sulphate in China this month, as a major producer in north China has entered month-long maintenance from early April and some other plants also mull production cut for April. 

Inventory pressure at nickel sulphate plants has somewhat eased compared with the previous two months, SMM survey showed. This, together with improved cash flows and downstream orders, drove nickel sulphate producers to firm up offers. Downstream producers of ternary precursors made concentrated purchases in the recent week, as most of them expected the prices had bottomed out. 

However, there is a lack of increase in new demand given the continued stagnation in the power battery market. This will keep a lid on nickel sulphate prices in the near term. 

SMM assessed prices of battery-grade nickel sulphate at 22,500-23,000 yuan/mt as of April 2, flat from March 30 when the prices added 250 yuan/mt on the day. The prices had declined since March 3, as the virus impact weighed on demand.