Chinese exports of refined nickel totaled 36,754 tonnes in 2023, an increase of 62.88% year on year from 22,566 tonnes in 2022, according to the customs data.
In December, China’s refined nickel exports jumped by 197.51% jump year on year to 7,256 tonnes. But this rise looks rather modest compared with the gains achieved in November, with a jump of 310.71%, and October, with an increase of 371.22% year on year.
Market participants attributed the rise in export volumes to the selling efforts of new domestic refiners.
In 2023, some of the biggest participants in the Chinese and Indonesian nickel markets, including Huayou Cobalt, Tsingshan Group, Jingmen GEM and CNGR New Energy Science & Technology, started to convert Class 2 nickel into Class 1, notably nickel sulfate into nickel cathode.
The rapid capacity-building quickly flipped the short-supplied Chinese refined nickel market into an oversupplied one.
At the same time, some of these participants – first Huayou and then GEM – managed to get their nickel cathode brands approved for delivery on the London Metal Exchange, paving the way for the exports of these cathodes. CNGR also applied for deliverability of its nickel full plate cathodes onto the LME in late 2023.
Fastmarkets previously reported that Huayou had begun exporting nickel cathode in August 2023, with its eyes on the European and Indian markets.
Later in the year, Huayou had extended its focus to Southeast Asia, while also trying to engage in long-term contracts with overseas buyers, sources told Fastmarkets.
These efforts by new entrants to target overseas buyers was a way to absorb the surplus in China’s domestic Class 1 nickel market, according to sources.
“We saw a big leap forward in refining capacity in 2023 compared to 2022,” a nickel pig iron (NPI) trader based in eastern China said. “This has turned the market into a surplus, especially when the Chinese economy was not performing well and overall demand was weak.”
The export activities by Chinese refiners were also reflected in the appearance of domestic brands of cathode in the LME warehousing system in September 2023.
But while demand from the overseas market remained subdued, most of the materials exported by China’s domestic brands were used for delivery purposes, sources said.
“Because demand from overseas markets was still sluggish, especially in the European market, [China’s domestic brands] had a hard time finding real downstream users,” a nickel trader based in Shanghai said.
Declining volume of seaborne material in Chinese market
Faced with competition from growing local supply and prolonged arbitrage losses, the volume of nickel cathode imported into China declined in 2023.
China imported 95,001 tonnes of refined nickel in 2023, a drop of 40.65% from with 160,058 tonnes in 2022, according to the customs data.
Fastmarkets’ calculation of the nickel import arbitrage averaged a loss of 2,211.78 yuan ($312) per tonne in 2023, deepening from a loss of 795.19 yuan per tonne in 2022.
Russian units made up the majority of Chinese nickel imports last year, accounting for 38,026 tonnes or 40.03% of the total imported volume. This was aided by Chinese sellers using nickel prices based on those on the Shanghai Futures Exchange for their 2023 long-term contracts and spot sales.
But volumes from Russia were on a general downtrend since reaching an annual peak at 7,026 tonnes in March. China imported 2,852 tonnes of nickel from Russia in December, a decrease of 59.41% from March’s peak. Total imports from Russia in 2023 were also down overall, at 38,026 tonnes, down by 17.97% from 46,359 tonnes in 2022.
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