Since the continuous rise in nickel sulfate prices after the holiday, nickel sulfate has become the focus of attention in the nickel industry chain recently, so what is the specific reason?
In a word, the supply and demand of nickel sulfate finished products are tighter than raw materials, making the price of nickel sulfate rise faster than raw materials in the near future. We analyze the finished product and the raw material side separately.
First of all, the focus is on returning to the situation of wet intermediates, the main raw material of nickel sulfate. Since the end of last year, Indonesia's wet process project A has started technical transformation, and the pace of production ramp-up has been relatively slow. Indonesia's wet process project B converted some of the intermediates to nickel sulfate. Under the premise that no new wet process projects are put into operation in the first half of 2024, the overall supply of wet process intermediates has shrunk. However, from the demand side, with the gradual resumption of work and production of salt factories after the holiday, the demand for raw materials still exists. In the same period, the supply of high ice nickel decreased, and the raw material gap caused by the reduction of high ice nickel in some enterprises needed to be filled by wet intermediates.
A phased mismatch between supply and demand has emerged. With the gradual advancement of the resumption of work and production of nickel salt manufacturers, the recovery of demand for wet intermediate products has also made its supply and demand tighter and more intense, and the price has risen. The upward speed once exceeded the finished product, and the salt plant was in a profit inversion for a long time and did not improve. At the same juncture, the supply of scrap as another raw material for nickel sulfate has not been improved, and the price has also begun to rise with the price of nickel sulfate and cobalt sulfate products rising slightly. In the case of the limited upward speed of nickel sulfate prices, the wet recycling plant is limited by high-priced raw materials, and the pace of resumption of production is slow and less than expected. After the situation of tight raw materials and high prices, the reluctance of salt factories to sell emerged, and the operating rate was difficult to return to the pre-holiday height. From another dimension, while the supply of nickel salts is limited by raw materials, the mismatch between the pre-holiday nickel salts and the downstream ternary precursor destocking rhythm exacerbates the mismatch between the supply and demand of finished products in the market.
Nickel salt manufacturers concentrated at the end of last year due to financial pressure to go to the warehouse, and the downstream ternary ternary material industry chain continued to complete the depot until February this year. When the good expectation of car sales in March brought a glimmer of hope due to the smooth flow of the material industry chain to the upstream, the problem of tight supply and demand completely broke out. After the holiday, the overall resumption of nickel sulfate production was less than expected, and the low inventory of finished products and downstream ternary precursor raw materials of the salt plant collided dramatically, and the price of nickel sulfate began to rise beyond expectations. The tension between the supply and demand of finished products gradually surpassed that of raw materials, and the salt factory gradually got out of the upside down, and the profits were repaired. As of today, all the raw materials for nickel salt production of nickel sulfate have come out of the upside-down.
However, on the downstream precursor side, although the share of ternary batteries has increased significantly so far, the sales of some models have been boosted, and the demand increment has been smoothly transmitted, which has brought about a relatively optimistic order in March. However, due to the squeeze on raw material prices brought about by the escalation of the price war of new energy vehicles, it is difficult for high-priced precursors to conduct downward. As an industry with a large overcapacity, nickel sulfate is also difficult to strive for large profits in the downstream market. It is expected that in the future, the rapid rise in nickel sulfate prices may be difficult to increase continously.
