Nickel Sulphate Prices to Rise amid High Raw Material Prices

SHANGHAI, Jan 5 (SMM) - The quotes of battery-grade nickel sulphate stood at 34,500- 35,500 yuan/mt last Friday, up 250 yuan/mt from a week earlier. The market transactions were sluggish. The market inquiries weakened after the concentrated transactions. The low-priced cargoes purchased two weeks ago have been consumed. This, combined with the higher nickel prices, encouraged the upstream to raise their quotes. The quotations were mostly at 34,500-35,500 yuan/mt. The spot inventories declined after downstream's concentrated stockpiling. The cash flow pressure at some nickel salt plants was alleviated. And they raised their prices. The raw material costs of nickel sulphate are expected to remain high considering the long-term contracts in 2022. The premiums of nickel briquette under long-term contracts in 2022 are mostly above $500/mt over LME nickel. And the coefficient of MHP under long-term contracts mostly exceeds 89%. Given the high raw material costs, nickel salt plants barely sold with discounts. The market transactions will be subdued this week after the completion of pre-holiday stockpiling. The nickel sulphate prices are expected to move between 34,500- 35,500 yuan/mt this week.

The quotes of battery-grade nickel sulphate stood at 40,000- 41,500 yuan/mt last Friday, 500 yuan/mt lower than a week earlier. The export orders of electroplating market weakened due to the COVID-19 pandemic. The demand for electroplating-grade nickel sulphate remained poor. But the prices rose along with the nickel prices. The current price gains will impose little pressure on the electroplating industry due to the small share of nickel sulphate in their raw materials. The prices of electroplating-grade nickel sulphate are expected to stand at 40,000-41,500 yuan/mt this week.

The average weekly premium of battery-grade nickel sulphate over nickel briquette was 9,000 yuan/mt last week, down 3,000 yuan/mt from a week ago. The prices of both nickel sulphate and NPI bottomed out as the low inventory bolstered the nickel prices. The nickel sulphate prices rose less than the nickel prices. But the higher costs of nickel sulphate will put greater pressure on the production. The nickel sulphate prices are expected to stabilise this week, while the nickel prices will rise further, further narrowing the premiums.

The average weekly profit margin of liquid nickel sulphate produced with dissolved nickel briquette was 0.5% last week. The weekly average loss of nickel sulphate produced with mainstream MHP was 1.1%. As of Friday, the nickel sulphate produced with diversified raw materials has incurred losses as the higher nickel prices eroded the profit margin of nickel sulphate. The NMC materials scrap coefficient rose to 116- 117% with the rising lithium prices. The nickel salt plants saw poor profits. But given that the current procurement demand has been met, their profits are unlikely to improve until the raw material prices drop. The raw material prices are expected to remain high following the nickel prices. The profits at nickel salt plants will remain at the current level.