CHOICE terminal shows that the main contract of Shanghai nickel futures, which had been rising, fell from the high of 270,000 yuan/ton in March to the low of 170,000 yuan/ton in July, the cumulative decline reached 37.03%. Experts analysis, overseas nickel rich areas to speed up production, downstream stainless steel market demand downturn, new energy battery technology replacement and other factors resulting in the current nickel price "out of favor", nickel spot and futures are expected to further decline.
Capacity release eased nickel prices
From January to March this year, Shanghai nickel futures main contract once out of the rising market, from the low of 150,000 yuan/ton in January to the high of 270,000 yuan/ton in March, a cumulative increase of 80%, LME03 contract also increased greatly. The market generally believes that geopolitical conflicts, inflation, logistics, trading mechanism loopholes and other factors jointly promote nickel prices. And the recent nickel futures and spot prices all the way down, in addition to Shanghai nickel futures performance is not good, Yangtze Nonferrous metal net reported on July 4, the national average price of nickel spot has fallen to 183000 yuan/ton, the decline and Shanghai nickel futures main contract basic equivalent. It is widely believed in the market that interest rate hikes in developed countries, long-term capacity release, weak demand for stainless steel downstream, new energy battery circuit technology switch and other factors have a certain pressure on nickel prices.
Reporters found that domestic A-share enterprises actively put into production overseas, A large number of smelting capacity is expected to be put into production next year. Since this year, there have been Zhongwei shares, Shengtun mining, Huayou cobalt industry and other a-share listed companies announced the progress of nickel smelting project in Indonesia. Wei shares proposed to particular objects in among them, the total amount of money raised through issuance of shares to less than 6.68 billion yuan, the base for Indonesia laterite nickel ore smelting high grade nickel project of describe a 6 tons, western guizhou base 8 describe tons of nickel sulfate project, in southern guangxi base 8 describe a tons of high grade nickel project, guizhou mizar base annual output of 200000 tons of iron phosphate project and added liquidity. Shengtun Mining plans to invest and build a nickel matte project with an annual output of 40,000 tons in Indonesia. Huayue Co., LTD., a subsidiary of Huayou Co., LTD., has completed the installation and commissioning of equipment in Indonesia, and successfully produced nickel metal, whose main performance indicators are qualified. Dow's guangdong Jana has invested in a large trade in nickel minerals and ore in Indonesia.
Su Bin, head of Caixin Futures Investment Service Center, told reporters, "Indonesia is a nickel-rich country, and there are preferential and encouraging policies for overseas enterprises to invest in Indonesia, especially for large projects. In the past two years, the number of A-share listed companies investing in nickel mining, smelting, and entrepot trade in Indonesia has increased, which objectively increased the future nickel spot supply and moderated the nickel futures price to some extent."
Downstream slack supply exceeds demand
In the upstream of the nickel industry chain expansion at the same time, to stainless steel, ternary lithium battery represented by the downstream nickel enterprises encountered demand "variable".
Su Bin told reporters to introduce the current situation of the nickel market, "due to repeated outbreaks, domestic and international stainless steel enterprises capacity supply exceeds demand, nickel demand is not prosperous. Previously, the downstream enterprises actively using nickel are mainly new energy enterprises, especially those focusing on high-nickel batteries. The typical products of the high-nickel battery technology route are ternary lithium batteries and nickel-metal hydride batteries. "There are a number of variables in the path of ternary lithium batteries that are slowing down nickel consumption."
A brokerage analyst agrees with the above view, on the high nickel battery market hold a cautious attitude, "the main drawback of ternary lithium battery is the problem of thermal control, now lithium iron phosphate battery technology route thunder, there has been a significant substitution effect. In the recommended Model Catalogue for Promotion and Application of New Energy Vehicles (the second batch in 2022) released in March this year, the proportion of lithium iron phosphate battery models has reached as high as 75%, and the market share of terum-lithium battery has been further squeezed. However, the traditional nickel-metal hydride battery has gradually shrunk due to its large volume, low energy density and less charge and discharge times. All this is bearish for the future consumption of nickel and it is only a matter of time before nickel futures and spot prices fall further."
However, he added, "The product that has a good chance of driving nickel demand in the long term is probably Tesla's 4680 cylindrical battery, which is high nickel like the ternary lithium battery. This product has a corresponding solution to the thermal runaway problem of ternary lithium batteries. If mass production and technical improvement are realized, it may regain some market share from the technological route of lithium iron phosphate batteries. At present, domestic ningde Times, Yiwei Lithium Energy, Guoxun High-tech, Penghui Energy, Yahua Group, and international LG New Energy, Panasonic, Samsung SDI and other layout of 4680 cylinder battery track. However, 4680 large cylindrical battery from the downstream enterprises through the verification, to obtain the general acceptance of the market, and then can compete with lithium iron phosphate battery, it is not a short time."
