Nickel Sulfate Price Review and Forecast

Price Performance: Last week, nickel sulphate prices rebounded, with the transaction range between 31,000-31,500 yuan/mt.

Raw material side:

1) MHP: The discount coefficient held stable at 79-80% against LME nickel. Due to raw material supply concerns among downstream nickel sulphate smelters, overall MHP purchase activities turned robust. Nickel sulphate accepted high MHP discount coefficient amid positive H2 outlook for automotive end-users. The overall supply of MHP available for sale remained limited, and cargoes slated to arrive in early Q3 have already been booked. As overseas hydrometallurgy project shutdowns may continue to fuel market concerns about raw material supply, MHP discount coefficient is expected to run strong in the short term. However, it will have limited upward room since downstream nickel sulphate smelters suffered losses.

2) High nickel matte: As new production projects gradually ramp up, high nickel matte supply will stay ample, which caused its discount coefficient to show a gradual downward trend. The current discount coefficient stays at 84% against LME nickel. However, due to significant difficulty in purchasing MHP for Q3, high nickel matte will be more popular as an alternative for MHP, which may further pressure high nickel matte prices downward.

Nickel sulphate:

Fundamentally, supply and demand weakened. Supply side, due to persisting Q2 raw material supply tightness and smelters’ losses, the overall nickel sulphate supply was lower than expected. Demand side, car purchase enthusiasm declined during the Labour Day holiday but recovered to previous levels in the second week of May, with sales performance meeting expected growth rates. Still facing certain inventory pressure, battery cell makers adjusted inventories. Therefore, overall orders fell, affecting demand for nickel sulphate. Currently, nickel sulphate prices are driven by costs. High discount coefficient, macro sentiments and industry chain support helped nickel prices spike, making nickel sulphate smelters suffer more severe losses. Therefore, they held prices firm. As smelters held low finished product inventories and downstream only maintained essential inventories, downstream precursor makers had to accept high-priced nickel sulphate. It is expected that nickel sulphate smelters may see some profit margin recovery in the future due to temporary stockpiling from downstream, and nickel sulphate prices will stay between 31,500-32,000 yuan/mt.

Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.