MethodologyContact usSupportLogin
Fastmarkets’ weekly price assessment for nickel sulfate min 21%, max 22.5%; cobalt 10ppm max, exw China was 37,000-38,000 ($5,460-5,608) yuan per tonne on February 3, up 3.45% from the previous week.
New demand for nickel sulfate comes after Chinese stainless steel and nickel giant Tsingshan Holding Group started producing nickel full plate by using nickel sulfate as a raw material in January. The move pushed down the Shanghai Futures Exchange price due to market participants’ expectations of a larger spot supply.
“Sentiment [in the nickel sulfate market] was boosted as Tsingshan snapped up nickel sulfate when the market was weak,” a trader source based in Shanghai said.
“If the rebound in the nickel sulfate market is driven by the actual electric vehicle (EV) demand, why didn’t we see stronger lithium prices?” a nickel producer source said about Tsingshan’s move.
Domestic nickel sulfate prices had been on a downtrend since December, when prices for nickel mattes and nickel full-plate cathodes were increasing. This also encouraged producers to use nickel sulfate, Fastmarkets learned.
In December, nickel prices on the London Metal Exchange climbed above $30,000 per tonne, a psychological level which had only been seen in March 2022, when the exchange suspended nickel trading due to a massive squeeze.
Meanwhile, Chinese integrated nickel plants were heard to be buying nickel sulfate instead of nickel mattes last week, when prices of the two were almost the same.
“It definitely makes more sense to buy sulfate if you are an [integrated precursor cathode active material] producer, since sulfate and matte are at similar price levels,” a nickel trader said.
The recent rebound in the nickel sulfate market also comes after production cuts in mid-December. The cuts were a response to lower downstream output from battery makers in November, market sources said.
Post-Lunar New Year holiday restocking has also lent some support to the market, according to sources.
Market sources believed that a rebound in nickel sulfate demand from the EV industry could still take time.
The typical consumption demand from downstream EV makers is said to be slowing down after China discontinued its 13 years of strong subsidies policy designed to spur the rapid development of its EV industry at the end of last year.
The slowing EV demand and a subdued outlook have been impacting the battery metal market since December. Other battery metals, such as lithium and cobalt, have also been affected.
Fastmarkets’ price assessment for cobalt sulfate 20.5% Co basis, exw China was 38,000-39,000 yuan per tonne on Wednesday February 8, down by 2,000 yuan per tonne from 40,000-41,000 yuan per tonne on February 3.
Because of the weaker demand from the EV industry, market sources were also skeptical about the recent rebound in the nickel sulfate market.
“The window for exploiting arbitrage terms normally could only last two to three months, since buying activities would soon wipe out the price gap between nickel and nickel sulfate, but thereafter I’m not sure if EV demand could genuinely pick up as expected,” a source at a precursor plant said.
The Chinese government extended the EV tax incentive in August, allowing EVs to be exempt from the 5% vehicle purchase tax. Local governments have also been rolling out regional EV-related subsidies to stimulate the economy since the beginning of 2023.
Nonetheless, “at least based on the seasonality, the demand [for nickel sulfate from the EV industry] will not turn around until the second quarter,” a veteran Shanghai-based nickel trader said.
“We are a bit pessimistic about the EV demand in the future,” another market source at a precursor plant said, citing a lean orderbook.
To get more of the latest market intelligence and insights on the nickel market, visit our dedicated page for nickel market insights page here.