Chinese nickel sulfate price sets fresh all-time high

Fastmarkets’ price assessment for nickel sulfate min 21%, max 22.5%, cobalt 10ppm max, exw China was at 35,000-38,000 yuan ($5,414-5,878) per tonne on Friday February 26, up by 1,000-3,000 yuan per tonne or by 5.8% from 34,000-35,000 yuan per tonne on February 19.

The Chinese nickel sulfate price has continued to break records and is at its highest level since Fastmarkets began tracking the market in July 2018.

The London Metal Exchange three-month nickel daily official price closed at 18,635 on Friday February 26, down by 877 (4.5%) per tonne from $19,512 a week earlier.

The LME price hit $20,110 per tonne on February 22 – a seven-year high.

The volatility of the LME nickel price and the new high not only pushed up the Chinese nickel sulfate price, but also turned market sentiment more cautious, sources said, leading to a big price difference between buyers and producers.

“Producers [are keeping the nickel sulfate] price firmly high amid strength in the LME nickel price, which has almost muted spot trades because buyers can’t afford the high price,” a buyer source told Fastmarkets.

“We [anticipated the high price] because the [nickel sulfate] price has been increasing all year, so we are only focusing on long-term contracts now,” a second buyer source told Fastmarkets.

Meanwhile, because there is still a shortage of mixed hydroxide precipitate (MHP) – the raw material for producing nickel sulfate – there is no sign that recent tight supplies will be relaxed any time soon, which is also supporting the price, sources told Fastmarkets.

“We are out of stock and focusing on delivering long-term contracts, but we did hear some smaller tonnages being transacted at a higher level by some small factories,” a producer source told Fastmarkets.

“The new energy vehicles (NEV) market is bullish – especially with the return of market participants after Chinese New Year – so it is [unlikely] the nickel sulfate price to fall. But lots of small market players still want to speculate, even with the high price,” the producer source added.

According to the China Association of Automobile Manufacturers (CAAM), China produced 2.388 million vehicles in January, up by 34.6% from January 2020, while sales rose by 29.5% year on year to 2.503 million units in the same month.

And the recovery in the automotive market, coupled with optimism over NEVs, will continue to bolster the nickel sulfate price, Fastmarkets understands.