In May, the downstream demand has not yet shown signs of improvement, and the prices of nickel salt have continued to fall. The price spread between nickel sulphate and pure nickel expanded further. The cost support brought about by the high nickel prices is unlikely to sustain amid a cliff-falling demand. Losses increased across various new energy sectors. In general, three factors accounted for the continuous decline in the prices of nickel sulphate crystals.
First, precursor plants did not improve their production schedules in May compared to April, and some of them even lowered operating rates in May. At the same time, trades under small orders were even more sluggish due to a wider gap between buyers’ acceptable prices and sellers’ selling prices. Second, due to the poor orders received by downstream ternary precursor factories, the overall demand for nickel sulphate is still weak. Some ternary enterprises have cut output sharply and pushed for lower nickel sulphate prices. Third, as some downstream buyers refrained from taking deliveries recently, nickel sulphate enterprises who suffered a large backlog of inventory and cash flow issues were driven to sell with discounts.
Recently, lithium salt prices have shown signals of stabilisation, inventivising inquiries from some manufacturers. If the lithium salt prices can stabilise or even rebound, the orders for ternary precursors in May are likely to improve. It is expected that the prices of battery-grade nickel sulphate will extend declines in May and move between 31,500-35,000 yuan/mt. Demand is likely to recover, though. SMM launched the SMM Battery Grade Nickel Sulphate Price Index and SMM MHP Coefficient (benchmarking SMM Battery Grade Nickel Sulphate Price Index) starting from September 1.
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