Prices:
In January 2025, nickel sulfate prices held steady at Yuan 25,500-26,000/t. In February, benefiting from the start of work after the Spring Festival and cost support (MHP discount of 80%, high-grade nickel matte price increase), nickel sulfate prices rose to Yuan 26500/t, but demand was disrupted by the cobalt policy in the Democratic Republic of Congo. In March, driven by factors such as intensified resource control in Indonesia (new export tax/quota policies), the rainy season, the MHP tailings dam accident, and increased consumption from Indonesia's integration projects, the supply tightened and nickel sulfate prices soared above Yuan 27,000/t.
In early April, the implementation of Indonesia's tariff policy led to a significant drop in nickel prices, with nickel sulfate falling below Yuan 26,800/t. By the end of the month, the price remained stable due to the tight supply of MHP. In May, the market showed a weak supply-demand dynamics. The high discounts of MHP forced some salt factories to reduce production, with production dropping by 4.18% month-on-month. Meanwhile, the weak demand for ternary precursors led to poor purchases, and nickel sulfate prices fluctuated weakly between Yuan 26,700 and 27,000/t.
In June, the nickel sulfate industry took the initiative to reduce inventory. Non-integrated producers struggled to boost production amid thin nickel plate margins. Weak nickel prices persisted due to demand contraction and recovering nickel supply in Indonesia. Meanwhile, the increase in production of ternary precursor and pure nickel projects in Indonesia may reduce MHP flows to China and limit the downward space for nickel sulfate costs. Coupled with the production cuts by enterprises, it is expected that the price of nickel sulfate in June may reach the bottom of nearly two months, with a range of Yuan 26,500 to 26,800/t. July could see prices rebound to Yuan 26,500-27,000/t as downstream restocking and destocking may slightly ease oversupply.
Source: Mysteel
Supply:
The supply of nickel sulfate in the first half of 2025 was mainly affected by the resumption of production after the Spring Festival, policy changes, and production cuts. Affected by the holiday and weak demand in January, non-integrated enterprises (especially those producing pure nickel sulfate) significantly reduced production due to losses, while integrated enterprises expanded their production of nickel sulfate to electrolytic nickel plates by taking advantage of the rise in nickel prices, maintaining overall supply stability. February saw a slow post-holiday recovery with low production, and the production increase mainly came from the sectors that shifted to producing nickel plates.
In March, integrated enterprises continued to increase production (supported by both self-sufficiency in raw materials and demand for downstream precursors and nickel plates), coupled with the rise in cobalt prices, resulting in a significant increase in nickel sulfate supply. But the tight market circulation still drives up prices. In April, supply slightly rebounded due to the release of nickel plate production capacity in Guangxi. However, Indonesia's tariff policy affected the growth of export orders.
In May, due to the shrinking demand for ternary precursors and the high discount coefficient of nickel intermediate products squeezing profits, nickel sulfate production decreased by 4.18% month on month, making it difficult for non-integrated enterprises to resume production of nickel plates. It is expected that weak demand and profit difficulties will continue in June.
In Q2, the demand for ternary precursors weakened. Coupled with the increase in China's refined nickel production, the production of nickel sulfate remained relatively stable year-on-year. However, after excluding the portion that switched to electrolytic production, the actual production of nickel sulfate decreased significantly year-on-year.
Source: Mysteel
Demand:
In Q2, reduced ternary precursor procurement by South Korean cathode makers and Indonesian project startups drove significant export declines from China during April and May. In May and June, due to the active inventory reduction and production cuts by ternary cathode factories and weak demand, the production of ternary precursors decreased.
Though Q3 traditionally marks China's peak consumption season, the expiration of delayed 90-day U.S. tariff exemptions for Japan/South Korea, combined with anticipated U.S. consumption slowdown, puts the recovery of exports under pressure. Consequently, Q3 demand may decline year-on-year. It is expected that the output of ternary precursors will slightly rebound to the high point of the second half of the year in August and September.
Additionally, changes in the cobalt policy of the Democratic Republic of the Congo may directly impact medium and low-nickel ternary materials. The increase in cobalt prices pushed up the cost of medium and low nickel raw materials, and the compression of processing profits forced production cuts. Automakers may accelerate their shift towards high-nickel or lithium iron phosphate (LFP), squeezing the market share of medium and low-nickel vehicles.
Source: Mysteel
Imports/Exports:
China's nickel sulfate imports stood at 18,264.019 tonnes in May, down 43.98% month-on-month (MoM) and 30.75% year-on-year (YoY), based on data from the General Administration of Customs of the People's Republic of China (GACC). From January to May, the total nickel sulfate imports reached 99,692.244 tonnes, up 1.60% year-on-year.
In May, China's nickel sulfate exports totaled 754.451 tonnes, up 32.89% month-on-month but down 58.70% YoY, according to data from the General Administration of Customs of the People's Republic of China. From January to May, China's total nickel sulfate exports reached 1,322.158 tonnes, showing a year-on-year decrease of 87.13%.
Cost and Profit:
Nickel supply remained tight in May. MHP discount coefficients rose to 85-86% in May, while nickel matte coefficients reached 87-89%. In June, nickel sulfate prices fell and losses widened amid downstream production cuts and price pressure, dampening MHP purchasing enthusiasm.
Nickel prices trended weaker in June amid demand contraction and recovering Indonesian supply. The increase in production of ternary precursors and pure nickel projects in Indonesia may reduce MHP flows to China, and the downward space for nickel sulfate costs was restricted. With enterprises cutting production, it is expected that the price of nickel sulfate in June may reach a two-month low.
Notably, despite robust high-grade nickel matte margins, the sharp increase in NPI prices and higher profits in March led some projects to switch to NPI production lines. There was basically no transaction in the market, and the available transaction prices were already higher than the previous levels.
In the third quarter, nickel sulfate demand may be impacted by U.S. tariff policies. Prices are expected to show a cautiously modest rebound in August and September, with the Q3 price forecast range projected at Yuan 26,700-27,000/t. The fourth quarter represents the traditional low season for consumption. Nickel sulfate demand is anticipated to decline amid increased supply from new MHP projects, leading to more relaxed raw material supply. The Q4 nickel sulfate price range is forecasted at Yuan 26,700-27,200/t.
Written by Cora Ji, jiruyan@mysteel.com
