China's nickel sulfate market is expected to keep benefiting from relatively tight supply in the remainder of the fourth quarter 2025, after experience sustained momentum in October thanks to short supply and strong demand from the traditional seasonal high.
Slow capacity unleash and robust demand offer solid support
On the supply side, two nickel salt plants in North China were originally scheduled to newly start operation or ramp up production from October to the end of November. Although this will add an increment of 400 - 500 tonnes in nickel content to the domestic nickel sulfate supply, the actual volume remains limited due to uncertainties in project timelines. As a result, the increase is still insufficient to meet domestic demand, and companies will continue to rely on external imports. Additionally, the shift of some high-grade nickel matte production lines to the stainless steel sector has further aggravated the supply shortage of nickel sulfate.
After China's National Day holiday ranging October 1 - 8, order signings and transactions progressed rapidly. According to Mysteel's research, nickel sulfate transactions were mostly concentrated in the first week after the holiday, driven by precursor plants replenishing stocks through spot purchases. The transaction price was around 28,300 yuan/tonne. By October 20, the average offers for battery-grade nickel sulfate jumped to 28,400 yuan/tonne, largely in line with Mysteel's pre-holiday forecasts, indicating that most salt plants had few stocks available for spot transactions since mid-October, strengthening their pricing power.
Source: Mysteel
On the demand end, the September market continued to benefit from the traditional peak season, primarily driven by sustained high demand from the CATL supply chain, coupled with increased export orders reported by some companies, leading to a significant rise in production. It is expected that the strong demand will persist through October and November.
According to Mysteel's research, China's ternary precursor production in October 2025 reached 91,400 tonnes, up 6.65% month-on-month (MoM) and 34.83% year-on-year (YoY). The production is estimated at 90,400 tonnes for November 2025, a slight decrease of 1.09% MoM but a notable increase of 22.73% YoY.
Source: Mysteel
High raw material cost sidelines producers
In October, the cost side of nickel sulfate was driven by the tight supply of MHP and the shift of high-grade nickel matte to other sectors.
According to China Customs, China's imports of nickel intermediate products (MHP) in September 2025 reached 190,500 tonnes, an increase of 11.66% MoM and 67.38% YoY. Among these, imports from Indonesia stood at 161,200 tonnes, a monthly increase of 16.92%, representing 84.60% of the total imports for the month. This volume still fell significantly short of the pre-holiday stocking demand from ternary precursor manufacturers.
Adjustments to Indonesia's RKAB quota policy, coupled with scheduled new projects in the fourth quarter and the first quarter of next year, have slightly alleviated raw material supply concerns. However, uncertainties regarding the actual commissioning of these projects remain. For the fourth quarter, the raw material supply for nickel sulfate is expected to remain tight. According to Mysteel's survey, most traders held limited MHP inventory in October, primarily reserved for in-house use.
Additionally, the tightening of cobalt exports from the Democratic Republic of Congo has driven up cobalt sulfate prices, indirectly increasing the synergistic production costs for nickel sulfate.
Apart from the firm cost, the nickel sulfate prices further benefited from the traditional peak season. The average price of nickel sulfate rose from Yuan 28,050/tonne at the end of September to Yuan 28,400/tonne by end-October. Leading companies, leveraging long-term fixed-price contracts and strategic resource layouts in Indonesia, maintained lower raw material costs compared to small and medium-sized producers. The latter, reliant on spot market purchases for restocking, saw their profit margins compressed and continued to operate under pressure.
Specifically, the quoted payables for nickel and cobalt contained in MHP in the first quarter of next year have been further adjusted upwards. Due to the shortage of cobalt intermediates, the supplementary role of MHP has become more prominent, leading to significant increases in payable quotes, which have been raised to 90% for nickel and 100% for cobalt, compared to 86-87% for nickel and 55-65% for cobalt based on long-term agreements for Q4 2025, and 88-89% for nickel and 85-87% for cobalt per recent spot transactions.
Influenced by the cobalt shortage, ternary precursor and cathode manufacturers have successively adjusted their cobalt payables quotes to 100%, while the last market transaction was concluded at 92%. But most battery cell manufacturers have not yet accepted the 100% payables. The adjustment of payables is still being transmitted and developing throughout the supply chain.
Conclusion
In October, China's nickel sulfate market was collectively fueled by short supply and traditional peak season, in addition to firm cost, though the robust demand in October was partly driven by some downstream consumers advancing their procurement demand. Nevertheless, the November demand performance is still relatively optimistic, keeping the supply tight and nickel sulfate prices resilient.
Mysteel expects nickel sulfate prices to hover between Yuan 27,700-28,200/tonne through the fourth quarter 2025.
Written by Aggie Hu, huchenying@mysteel.com
