China’s nickel sulfate price sets new all-time high

The Chinese nickel sulfate price narrowed upward to reach a fresh all-time high in the week to Friday July 23, with the market continuing to find support from limited supply of the raw material mixed hydroxide precipitate (MHP) and strong demand from the electric vehicle (EV) market.

Fastmarkets assessed the price of nickel sulfate min 21%, max 22.5%, cobalt 10ppm max, exw China at 37,000-38,000 yuan ($5,707-5,861) per tonne on July 23, narrowing upward by 1,000 yuan per tonne from 36,000-38,000 yuan per tonne on July 16.

The latest assessment, with a midpoint of 37,500 yuan per tonne, is the highest since Fastmarkets began tracking the market in July 2018, surpassing the previous high of 35,000-38,000 yuan per tonne reached on February 26.

“The price of domestic nickel sulfate is back to its highest level – similar to what we previously saw in February this year amid the multiyear-high nickel prices on the London Metal Exchange at that time,” a nickel sulfate producer source told Fastmarkets.

“But this time, the increase [in the nickel sulfate price] is more driven by a supply-demand mismatch especially considering the continuous shortage of MHP and the increasing production of battery raw materials makers in the second half of this year,” he added.

China’s new energy vehicle (NEV) output increased by 14.3% from May to 248,000 units in June; this is also a year-on-year jump of 134.9%. Similarly, NEV sales in June also rose by 17.6% month on month and by 139.3% year on year to 256,000 units, according to the China Association of Automobile Manufacturers.

A buyer source also noted raw material tightness in the market, saying “the continuous shortage of MHP is currently difficult to be eased and I heard some domestic nickel sulfate producers have already suspended production until the middle of August [because of the MHP shortage], leading to a worse situation.”

MHP payables have increased to around 93-94% of the LME nickel cash price, up from around 84% at the end of last year, market participants told Fastmarkets.

Meanwhile, recent flooding in the Chinese province of Henan has also disrupted local transport networks while a few nickel sulfate producers in the area have had their production affected, further underpinning the nickel sulfate price.

The LME three-month nickel daily official price stood at $19,266 per tonne on July 23, up by $359 per tonne per tonne from $18,907 a week earlier.

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