Nickel sulphate inventories kept falling, supporting battery-grade nickel sulphate prices

SHANGHAI, Mar 17 (SMM)—Nickel prices fluctuated at a low levels last week. The market quotations of battery-grade nickel sulphate was slightly lowered to 35,000-36,000 yuan/mt. The cost of dissolving nickel beans into nickel sulphate was more effective at 28,000-30,000 yuan/mt. However, the dissolution capacity was limited, and the supply of nickel sulphate was tight, which had slowed down the fall in spot prices. The actual transaction prices last week were between 34,500-35,000 yuan/mt. The transactions were scarce as the buyers and sellers were standing sideline.

Premiums of battery-grade nickel sulphate over pure nickel (mainly nickel briquettes and powder) further increased to an average of 38,800 yuan/mt (Ni content) last week, which was much higher than the cost of precursor plants using nickel briquettes/powder to produce liquid nickel sulphate. The battery-grade nickel sulphate remained in short supply, and downstream demand was strong. The declined output in February drove up the prices of nickel sulphate. In addition, the market dissolution capacity was limited despite the sufficient nickel briquette (most precursor companies do not have dissolution production lines) , suppressing the demand and premiums of some nickel briquette, and the premiums of nickel sulphate was expanding.

The prices of battery-grade nickel sulphate is expected to move between 34,000-35,000 yuan/mt this week.

Nationwide’s nickel sulphate output stood at 15,100 mt (Ni content) in February, down 5.86% month on month but up 132.91% year on year. Among them, the output of battery-grade nickel sulphate was 60,900 mt, and that of electroplating-grade nickel sulphate was 7,600 mt. In February, some nickel salt plants suspended work due to CNY holidays or the tight supply of raw materials (mainly intermediate products), and the output declined. In addition, the accident in a large plant caused the suspension of the nickel sulphate production line, and the self-dissolving production of nickel sulphate was not resumed until end-February. China’s nickel sulphate output is expected to rise 15.19% month on month to 17,400 mt (Ni content)

The overall downstream demand in February fell by 8.7% month on month but increased by 155.8% year on year to 15,900 mt (Ni content) mainly due to the fewer working days, and the demand from new energy industry was 13,500 mt in metal content. According to SMM survey, the overall downstream demand in March is expected to increase by 12.4% month on month to 17,900 mt (Ni content).

China's nickel sulphate inventories fell by 626 mt of metal content in February, as the nickel sulphate output decreased during the CNY holiday and the demand exceeded the supply. SMM expects that the net import of nickel sulphate will be 211 mt (Ni content) in March, and nickel sulphate inventories are likely to fall by 291 mt (Ni content).