FOCUS: Why Chinese battery raw materials producers no longer scramble for nickel briquette

While nickel briquette started to become a viable alternative as a precursor of nickel sulfate for Chinese battery raw materials producers in early 2021, their enthusiasm for the product appears to have waned in recent weeks, resulting in a less active spot market.

Previously, a sharp decrease in nickel briquette inventory levels at London Metal Exchange warehouses had Chinese market participants worried that there would be a shortfall that would exacerbate the tight supply of battery raw materials, particularly with mixed hydroxide precipitate (MHP) experiencing a sustained shortage.
But recent stock decreases in the market have not generated much concern, and Chinese battery raw materials producers appear to have calmed down based on the steady premiums for nickel briquette.
Fastmarkets’ monthly assessment of the nickel min 99.8% briquette premium, cif Shanghai was $150-200 per tonne on July 27, unchanged for a second month.

“We often see an inverse relationship between LME prices and premiums, where premiums can pick up when the LME comes down, and vice versa… and the high levels [of LME nickel price] we've seen in July and August could well have contributed to the weak performance of nickel briquette...


Yingchi Yang

August 23, 2021

06:36 GMT