[SMM Analysis] Nickel Sulfate in China is in short supply in June and may continue to go to the warehouse in July.

SMM, July 9th,

From the supply side,

In June, China produced 9800 tons of metal nickel sulfate, with a physical volume of 45000 tons, an increase of 5.14% from the previous month and a decrease of 20.52% from the same period last year. Among them, the output of battery grade nickel sulfate is 39800 physical tons, and that of electroplating grade nickel sulfate is 5200 physical tons. The output of nickel sulfate increased slightly in June compared with the previous month, which is mainly related to the resumption of production in the No. 1 Nickel Sulfate Plant in North China. In June, the order situation of downstream precursors showed no obvious signs of improvement, and the market demand for nickel sulfate was weak; the transaction price of battery-grade nickel sulfate market was still close to the cost or upside down, and some manufacturers chose to do processing for some traders with advantages in raw material cost to maintain factory operation. It is understood that some of the intermediate products that did not arrive on time in June will arrive in Hong Kong in July, and some nickel sulfate plants will have a more adequate supply of raw materials, and there are plans to increase production slightly, so it is expected that the national output of nickel sulfate will continue to increase slightly in July 2020 from the previous month, an increase of 5.78% to 10500 tons of metal.

From the demand side,

In June 2020, China's total demand for nickel sulfate was 11329 metal tons, of which the output of ternary precursors corresponding to the demand for nickel sulfate was 8703 metal tons, up 17% from the previous month and 23% from the same period last year. SMM expects orders for ternary precursors to continue to rise slightly in July, with total demand for nickel sulfate increasing to 11636 metal tons.

Taken together,

In June 2020, China's nickel sulfate continued the trend of going to the warehouse last month, and the inventory balance of that month showed the removal of 1381 metal tons. China's nickel sulfate may continue to go to storage in July, but as some of the intermediates that did not arrive on time in June will arrive in Hong Kong in July, some nickel sulfate plants will have a more adequate supply of raw materials, and there are plans to increase production slightly. SMM expects the national nickel sulfate removal inventory to decrease by 18.2% month-on-month in July.