Chinese nickel sulfate price sets another 2020 high on LME futures strength

Fastmarkets assessed the price of nickel sulfate min 21%, max 22.5%, cobalt 10ppm max, exw China at 29,500-31,000 yuan ($4,503-4,732) per tonne on Friday December 18, up by 2,000-2,500 yuan per tonne (8%) from 27,500-28,500 yuan per tonne from a week earlier.

The LME three-month nickel contract set an intraday high of $17,880 per tonne on December 15, marking a fresh 14-month high. It closed the official session on December 18 at $17,616 per tonne, up by $362 per tonne (2.1%) from $17,254 per tonne on December 11.

“Market sentiment is pretty cautious now, and there is some fear of buying at these high levels,” a buyer source said.

“The [LME nickel price] surge is pushing up the nickel sulfate market, and offers are up notably in the recent two weeks,” a second buyer source said.

The second source added that his company now mainly relies on long-term contacts for supply because spot prices are “too high”.

Other sources also noted thinner spot trading in China’s nickel sulfate market following the spike in prices, but the market continues to be underpinned by a strong performance in the country’s automotive market in recent months.

Chinese carmakers produced 2.85 million units in November, up by 9.6% year on year, and sold 2.77 million vehicles, up by 12.6% from a year ago, according to the China Association of Automobile Manufacturers (CAAM).

Output and sales of new energy vehicles (NEVs) stood at 198,000 units and 200,000 units in November, up by 75.1% and 104.9% respectively on a year-on-year basis.

“The market outlook is rosy with the EV market gaining new momentum home and abroad, and we expect more long-term nickel sulfate orders next year,” a producer source told Fastmarkets.

CAAM predicts sales of NEVs in China could rise by around 8% year on year to 1.3 million units this year, and jump by around 40% on the year to 1.8 million units in 2021.