High nickel, low cobalt, increasing demand for nickel.

Since mid-to-late April, nickel and Shanghai nickel have risen sharply, setting new highs in nearly three years, amid heightened expectations of tighter supply from US sanctions on Russian nickel. After the Russian nickel issued a normal position of production and operation activities, nickel price high shock disk consolidation, supply and demand tight balance pattern will make nickel price strong shock.

The Philippines and Indonesia are the main suppliers of nickel ore in the world. Recent environmental reviews in the Philippines have not led to a significant reduction in the production of large nickel mines. In addition, Indonesia has relaxed its export quota for nickel mines, and nickel production has resumed. The combined supply of nickel in the two countries has become looser. In the first quarter, China imported 6.57 million wet tons of nickel, an increase of 3.55 million wet tons over the same period in 2017.

In addition, Australia, Russia, Guatemala and New Caledonia are the major global producers of nickel sulfide. In the first quarter, imports of nickel sulfide from the four countries increased by 250,000 wet tons compared with the same period last year. Since nickel sulfide is mainly used to produce nickel sulfate, and nickel sulfate is applied to ternary batteries, in the background of the rapid growth of production and marketing of new energy vehicles in China, this will inevitably drive the import demand of nickel sulfide. The current tight supply of nickel sulfide has led to a decline in refined nickel production. In the first quarter, China's refined nickel output was 37,000 tons, a decrease of 5,000 tons from the same period last year.

According to WBMS data, the supply and demand gap of the global nickel market in January-February 2018 was 24,000 tons, and the supply and demand gap pressure did not ease. In terms of nickel inventory, as of May 4, the previous period's nickel inventory and LME nickel inventory were 18,000 tons and 50,000 tons, respectively, from the beginning of this year. With the supply of refined nickel declining and the consumption of new energy car batteries increasing, domestic and foreign nickel stocks will continue to decline.

With the rapid growth in the production and sales of new energy vehicles, the demand for nickel sulfate has steadily increased, resulting in a tight supply of nickel sulfate. However, the proportion of nickel consumption currently used for lithium batteries in total demand is very low, and it is difficult to significantly increase the demand for nickel. At present, the global nickel consumption used in the battery field is about 50,000 tons, accounting for 3 % of total demand; Domestic nickel demand for batteries is about 20,000 tons, accounting for 2 % of total demand.

In the field of automotive batteries, lithium ion batteries and lithium iron phosphate batteries are mainly used. Due to the high energy density of lithium ion batteries, it can increase the range of new energy vehicles, so it is the main development direction. At present, ternary batteries account for about 40 % of the battery market share, and it is expected that the market share will continue to expand in the future. In the current ternary battery, the ratio of nickel, cobalt, and manganese is 6:2:2.

In view of the high cobalt price and the increase in battery production costs, the future ternary battery will be developed in the direction of "high nickel and low cobalt", with a ratio of nickel, cobalt, and manganese of 8:1:1. It is estimated that between 2020 and 2025, China's new energy car batteries will use about 90,000 tons of nickel per year, and will gradually increase the proportion of nickel consumption.

Although nickel currently accounts for a small proportion of the three-way battery composition of new energy vehicles, the trend of high nickel and low cobalt in the future is obvious, which will increase nickel demand. In the long run, the performance of nickel prices is worthy of expectation. In the short term, due to the weak outlook and the end of the US sanctions on nickel, nickel prices have returned to fundamentals. The tight balance of supply and demand will support the high range of nickel prices.

The page contains the contents of the machine translation.