S&P Global Commodity Insights Evaluates Nickel Sulfate Prices Amid LME Volatility

S&P Global Commodity Insights evaluated spot battery-grade nickel sulfate with a minimum of 22% nickel and a maximum of 100 ppb magnetic material at Yuan 48,000/mt DDP China on March 17, a day-on-day decrease of Yuan 8,000/mt. The assessment has not changed since March 10, when it was at Yuan 56,000/mt.

Offers were from Yuan 49,000-50,000/mt, down from Yuan 65,000/mt peak last week when market uncertainty sent offers to all-time highs, market sources said.

Spot liquidity should stay thin for a while despite lower offers as consumers kept seeing how trading would play out on the LME, market sources said.

“There is no dare to buy now and the market is still stabilizing,” the source from a Chinese producer said, also noting they had been hearing offers at around Yuan 50,000/mt.

While sulfate prices do not typically reflect that of its raw materials in the short term, the trend is aligned in the long term, as they will still have to adjust prices by LME nickel prices, said another Chinese producer.

Nickel trading on the LME has not been without its pain points upon its restart: when operations restarted, trading was suspended just after a few minutes as the systems failed to pick up a small number of trades that were done below the daily price limit (defined as 5% back to back).

Normal trading activity would resume on the LME the same day but with the daily limit on movements in prices increased to 8% from 5% from March 17, based on the three-month contract's closing price on the previous business day, the LME added.

The LME three-month nickel price was trading at $41,945/mt, the lower limit of the day based on the closing on March 16.

“Downstream consumers are working with their inventories for now, and there may be production cuts on the table if the situation drags out,” said one trader.