https://www.miningweekly.com
Construction|Manufacturing|Projects|Manufacturing
Construction|Manufacturing|Projects|Manufacturing
construction|manufacturing|projects|manufacturing-industry-term

Woodmac predicts surge in nickel in sulphate demand

8th June 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

Font size: - +

PERTH (miningweekly.com) – Demand for nickel in sulphate from the electric vehicle (EV) market is expected to reach some 800 000 t/y by 2035, while production is expected to rise from the 211 000 t produced in 2019 to peak at 450 000 t by 2027, says consultancy firm Wood Mackenzie (Woodmac).

“Existing and would-be nickel producers are being drawn to the possibility of manufacturing sulphate to benefit from perceived premiums payable on nickel sulphate sales. While premiums have long been recognised in the plating sector, it is less clear in the EV battery space. The only visibility on pricing is Chinese selling prices,” Woodmac research director Andrew Mitchell said.

Between 2018 and the first half of 2019, nickel sulphate in China sold at a premium to the nickel price on the Shanghai Futures Exchange (SHFE), but the situation reversed in July 2019 and through to the end of December, to a discount of up to 10%.

The move to a discount corresponds to a period where the Chinese government removed subsidies on EV sales as well as a jump in nickel price. In effect, sulphate consumers could not afford any premium and demand was impaired, Mitchell said.

However, Woodmac still expects the nickel sulphate market to move into surplus this year, and potentially remain oversupplied through to at least 2025.

Mitchell said that the main reason for the oversupply is the additional material to be generated by three high-pressure acid leach plants currently under construction by Chinese groups in Indonesia. The combined capacity of these plants is 160 000 t of contained nickel, all of which is destined to produce nickel sulphate.

“A price premium is necessary to cover the additional processing costs to produce the sulphate. So, while higher prices for nickel sulphate over SHFE nickel prices can prevail, these may not result in increased margins for the producer. According to our data, net of feed purchase costs, the cost of producing nickel sulphate from mixed hydroxide precipitate has averaged $3 500/t nickel.

“Clearly there is no guarantee that high premiums now equate to similarly high premiums in the future. That said, as the demand for nickel sulphate from the battery sector is expected to accelerate, it is feasible that premiums will be available in the years ahead.”

Mitchell noted that in the longer term, additional nickel sulphate production is needed to meet the forecast growth in demand, particularly from the EV sector. Around 500 000 t of additional nickel in sulphate will be required over the eight-year period from 2028 to 2035.

“Clearly, meeting this rising demand will be a challenge for the industry, but it does provide opportunities for those with nickel projects waiting in the wings to press ahead with development, if funding can be secured.”

Edited by Creamer Media Reporter

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.091 0.126s - 114pq - 2rq
Subscribe Now