Analysts believe that since the fourth quarter of 2020, domestic refined nickel demand has defied the traditional off-season trend, with demand from the new energy and alloy industries driving the recent sustained strength in nickel prices. With the promotion of high-nickel ternary batteries, demand for nickel in the new energy vehicle sector is further increasing. It is estimated that by 2030, global battery demand for nickel is expected to reach 160,000 tons, accounting for 31% of the total.
On February 19, the average price of electrolytic nickel was reported at 142,800 yuan/ton, a new high since September 2019, marking the sixth consecutive day of price increases. The average prices on February 18 and 19 increased by 2,850 yuan/ton and 2,950 yuan/ton respectively compared to the previous trading day. Since the beginning of this year, the average price of electrolytic nickel has cumulatively increased by 13,400 yuan/ton, an increase of over 10%.
"The main reason for the rapid rise in electrolytic nickel prices in the short term is the general increase in non-ferrous metal prices, and the positive fundamentals for nickel, like copper. In addition, nickel is highly speculative, with speculation based on expectations," Zhao Ming, a nickel analyst at Shanghai Metals Market, told the China Securities Journal.
Minmetals Futures believes that the rise in nickel prices is due to factors such as tight supply of refined nickel and strong demand during the off-season.
On the supply side, data from Mysteel shows that in the fourth quarter of 2020, domestic electrolytic nickel production decreased by 9.53% year-on-year to 40,300 tons. According to statistics from the General Administration of Customs, in the fourth quarter of 2020, net imports of refined nickel decreased by 13.9% compared to the third quarter to 30,000 tons.
According to data from Mysteel.com, China's refined nickel production in January was 13,000 tons, down 7.66% month-on-month and up 7.53% year-on-year. On February 19, total domestic refined nickel inventory increased by 2,100 tons to 38,300 tons compared to February 5, representing an increase of 5.74%.
On the demand side, Minmetals Jingyi Futures stated that since the fourth quarter of 2020, the overall demand for refined nickel in China has shown a strong off-season trend, with demand from new energy and alloy sectors being particularly significant. This is also an important factor driving the recent continuous rise in nickel prices.
According to data from Shanghai Metals Market, since the fourth quarter of 2020, the average monthly output of nickel sulfate in China has reached 16,600 metric tons. Due to the continued strong demand for new energy electric vehicles worldwide, midstream ternary precursor and ternary material manufacturers have maintained high production schedules.
Keliyuan expects its net profit attributable to shareholders of the listed company to be between RMB 45 million and RMB 60 million in 2020. The company stated that during the reporting period, it achieved cost reduction and efficiency improvement, with the continued growth of its main business leading to a significant improvement in its profit level. Specifically, benefiting from the continued growth in market demand for Toyota HEVs, the sales volume of the company's upstream HEV supply chain products, such as foamed nickel and battery plates, continued to grow as production capacity was gradually released. The profit contributions of companies such as Changde Liyuan, Hunan Keba, and Kelimei also increased significantly.
In a research report disclosed on January 29, GEM Co., Ltd. stated that under the global trend of rapid development of ternary lithium battery technology for new energy power towards high nickel and low cost, the supply and demand relationship of nickel resources will tend to be tight in the next three years, and nickel resource shortage is a high probability event.
Previously, GEM Co., Ltd. stated in a research report disclosed on December 28, 2020 that ternary batteries, especially high-nickel ternary batteries, have significant advantages such as high energy density, good cycle performance, and long driving range in the present and the next 10 years. They are in line with the development trend of new energy vehicles with long driving range and high performance and are the mainstream batteries for passenger cars worldwide. The company firmly believes that high-nickel ternary batteries will remain the mainstream for development now and in the future.
Anxin Securities stated that although the current demand for nickel in the battery sector is less than 10%, the demand for new energy vehicles continues to rise, and the global production of new energy vehicles is expected to approach 30 million units by 2030.
Industry insiders say that as new energy subsidies are gradually phased out, cost will become the primary focus for electric vehicle manufacturers. As a result, the penetration rate of high-nickel ternary batteries, which have lower unit electricity costs, is expected to increase rapidly, and battery demand is expected to become the largest sector for nickel demand in the future.
