LME Nickel Stocks









**HANGHAI, Dec 25 (SMM) – Nickel sulphate market in China and around the world saw a slight surplus in 2019, a SMM survey showed. Consumption weakness in the second half of the year, limited restocking demand at year-end and producers’ inclination to firm up offers amid smaller margins resulted in backlogged inventories at nickel sulphate plants, but the overall stocks levels were not high. **

**SMM forecasts a roughly balanced nickel sulphate market in China in the next two years, with the annual average surplus standing below 20,000 mt in physical content. **

Global demand and supply balance for nickel sulphate

**Prices of nickel sulphate, an essential raw material used in batteries, retreated after a rally this year, as national subsidy cuts for new energy vehicles, starting from June 25, and selloffs of fossil-fuel vehicles squeezed demand for the material in the second half of the year, cutting premiums of battery-grade nickel sulphate against refined nickel. **

**But SMM expects the premium, despite moderation, to stay higher than the costs for producing nickel sulphate by dissolving refined nickel in the upcoming two years, suggesting room for profits to produce nickel sulphate with refined nickel as feedstock. **

The production costs of nickel sulphate solution by dissolving nickel briquette/powder stood at 7,000-8,000 yuan/mt in metal content, SMM assessed based on data in 2018.

**This compared with estimated premiums of nickel sulphate over refined nickel at 10,000-15,000 yuan/mt in Ni content for the next three years. The premiums narrow from levels in 2018-2019 as an absence of capacity bottleneck will likely keep the nickel sulphate market well-supplied. **

Nickel sulphate supply in 2019-2022

**Global capacity of nickel sulphate will likely increase 350,000 mt from a year earlier to 1.39 million mt in 2019, on a physical content basis, with additions in China accounting for 330,000 mt, SMM estimates. **

**The capacity will extend its expansion globally in 2020-2022, hitting a total of 2.5 million mt by 2022, with a compound annual growth rate (CAGR) of 12%. **

**China’s Jinchuan Group, Jilin Jien Nickel, Australia’s BHP, Finland’s Terrafame, and Indonesian wet-process projects will contribute to majority of the capacity growth. **

Global production of nickel sulphate is forecasted at 940,000 mt in physical volumes in 2019, with an increase of 25%, down 5 percentage points from 2018. This is largely due to slower output growth in top producer China, which is expected to fall 17 percentage points year on year to 33%.

**Reduced demand from China’s NEV market, together with squeezed margins on the back of rising nickel prices, pushed most Chinese nickel sulphate producers into suspension or cutbacks in the second half of the year. **

**SMM expects the increase in global production of nickel sulphate to further slow in 2020, to a rate of 9%, amid a reshuffle in the power battery industry as the Chinese government moves to cut its support by fully phasing out NEV subsidies in 2020 and scrapping the list of recommended battery suppliers. **

**Production growth of nickel sulphate globally will likely recover above 20% in 2021-2022 as demand expands with the NEV market on track for positive development. **

Global production and capacity of nickel sulphate

Demand for nickel sulphate in 2019-2022

**Global production of ternary precursor, which is the major consumer of nickel sulphate, is expected to advance 35%, to 350,000 mt in 2019, SMM assessed. NCM523 and NCM622 account for 67% of the total output with NCM811 and NCA taking up 30%. **

**Precursor output in China is estimated to rise 38% on the year to 275,000 mt, with NCM523 and NCM622 taking up 72% while NCM811 and NCA making up only 23%. **

**Slow progress towards high-nickel batteries in China after NEV subsidy cuts weighed on the share of precursor NCM811 and NCA. **

**SMM estimates China’s production of ternary precursor at 515,000 mt in 2022, with a CAGR of 17% in 2020-2022. **

Global and China’s production of ternary precursor









LME data week from December 23 to 27
Live Warrants started the week at 119.850 (85.35%) and ended at 117.300 (81.9%) Cancelled Warrants started the week at 20.562 (14,65%) and ended at 25.890 (18.1%)
Opening Stocks are now at 143.190, +2.778 this week






**China ferronickel, NPI imports rose 63% YoY in November **

**Data Analysis 11:16:43AM Source:SMM **
SHANGHAI, Dec 30 (SMM) – About 229,000 mt in physical content of nickel was imported into China in the form of ferronickel (FeNi) and nickel pig iron (NPI) in November, showed the latest Customs data.

**This was 62.8% higher from a year ago, and 35.65% higher from a month earlier. **

Indonesia, New Caledonia, and Brazil were the top three suppliers to China last month, accounting for 187,600 mt, 13,900 mt, and 5,400 mt of imports, respectively.

**Imports in the first 11 months of the year grew 93% from the same period in 2018, and stood at 1.72 million mt in physical content. **

In January-November, materials from the top supplier Indonesia soared 125% year on year on the back of rising new smelting capacity in the country. The world’s top nickel miner Indonesia would ban nickel ore exports from January 2020 as it seeks to process more of its resources at home.

**On Ni content basis, China’s overall imports in November were roughly the same as that in September, standing at 34,600 mt, even as the imports in physical volumes last month were 14,000 mt higher than September. **

**Compared to September, intake of Indonesian lower-grade NPI was 20,000 mt in physical content higher in November while imports of FeNi with a grade above 15% fell 6,000 mt in physical volumes, SMM calculations showed. **

SMM expects China’s monthly average imports of FeNi and NPI to stay at high levels of 30,000-35,000 mt in Ni content before commissioning of new stainless steel projects in Indonesia.
Souce SMM


China’s production of qualified passenger NEVs up 24% in November

**Industry News 10:41:20AM Source:SMM **
**SHANGHAI, Dec 30 (SMM) – About 89,000 new energy passenger vehicles produced last month in China obtained qualification certificates, down for the fifth consecutive month on a yearly basis, by 41.63%, but 23.96% higher from a month ago, lifted by outstanding performance of the pure EV market, showed data from the Ministry of Industry and Information Technology (MIIT). **

**Production of pure EVs that obtained qualification certificates rose 29.3% month on month in November, with the output of Bestune’s B30EV400 model soaring 235.44%. **

**Sales pf passenger NEVs, meanwhile, registered year-on-year declines for a fifth straight month in November. **

According to SMM database, about 82,000 NEVs obtained qualification certificates in China in October, up 8.5% from a month ago. New energy passenger vehicles accounted for the greatest share of 86.8%, while new energy busses took up the smallest 3.7%. Production of NEVs with qualification certificates stood at 913,000 units in January-September.
Source SMM