【SMM Analysis】Profit Advantage of Integrated Refined Nickel Enterprises Reselling Nickel Sulphate Becomes Prominent

The pathway for producing electrodeposited nickel through externally purchased nickel sulphate has been closed:

As of now, the spot price of nickel sulphate has recorded a significant increase of 5% compared to the beginning of the month, while the SMM benchmark price for electrodeposited nickel only rose slightly by 2.2% MoM. The divergence in price trends has fundamentally altered the price spread structure between raw materials and finished products: the real-time price difference between battery-grade nickel sulphate and electrodeposited nickel has narrowed to 882 yuan/mt, rendering the production path of preparing electrodeposited nickel from externally purchased nickel sulphate economically unfeasible.

Immediate losses have occurred in the production of electrodeposited nickel from externally purchased raw materials:

Immediate profit calculations show that the real-time profit margin for producing electrodeposited nickel using MHP has entered a loss range of -1% to -6%; the production path using high-grade nickel matte raw materials also faces cost losses of -2% to -3%.

The pathway of replacing externally purchased raw materials with externally purchased nickel sulphate has not yet opened:

It is noteworthy that, despite the losses in raw material processing paths, the scheme of using finished nickel sulphate as a substitute raw material is still not economically feasible. Calculations show that the immediate loss margin for producing electrodeposited nickel from externally purchased nickel sulphate is as high as -5% to -7%, further expanding the loss extent compared to raw material processing paths.

Integrated raw material enterprises still have profit margins in producing electrodeposited nickel:

Integrated enterprises with self-supply capabilities still maintain profit margins in electrodeposited nickel production, while processing enterprises relying on externally purchased raw materials are already facing immediate cost losses.

Integrated raw material enterprises have higher profits from selling nickel sulphate than from selling refined nickel:

Based on immediate costs, the immediate profit margin range for producing refined nickel using integrated MHP raw materials is 4%-6%, while processing the same batch of MHP raw materials into nickel sulphate for sale can increase the profit margin to 12.4%. The profit from selling nickel sulphate is significantly better than that from selling refined nickel. The immediate profit margin for producing refined nickel from integrated high-grade nickel matte has been compressed to 0%-2%, but turning to selling nickel sulphate can restore the profit margin to 9.3%. Therefore, currently, integrated raw material enterprises have higher profits from selling nickel sulphate than from selling refined nickel.

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