<article><p class="lead">China's domestic nickel sulphate prices rose to a new high on 27 July, with import prices also surging amid burgeoning demand from the new energy vehicle (NEV) and battery sectors and tight local supply.</p><p><i>Argus' </i>assessment for domestic nickel sulphate rose to a record high at 37,000-38,000 yuan/t ex-works yesterday on strong demand and low availability. The figure was up by 23pc from Yn30,000-31,000/t at the start of 2021 and up by 37.6pc from Yn24,500-30,000/t a year earlier.</p><p>Import prices for the cargo yesterday were at $4,450-4,650/t cif China. Import volumes of nickel sulphate in January-June stood at 19,528t, up by 632pc from 2,669t in the same period in 2020. </p><p>Supply concerns over nickel matte, an intermediate product of nickel sulphate production, arose after a 6.2 magnitude earthquake on Monday struck off Sulawesi island, Indonesia, where Vale Indonesia's nickel matte plant is located. </p><p>The company had reported <a href="https://metals.argusmedia.com/newsandanalysis/article/2237085">a 16.7pc decline in output</a> of nickel matte during January-June from a year earlier as January-March output was cut by 14pc because of maintenance.</p><p>"The supply rise of new energy battery materials has been lagging demand gains after China recovered from the Covid-19 pandemic in the second quarter of 2020, as it takes time for new facilities' construction and production to ramp up, so the prices still have room to go up," a market participant said.</p><p>China has incentivised the development of NEVs to achieve its goal of decarbonisation by 2060. Beijing announced in April 2020 that it would extend government subsidies on NEVs for two years to the end of 2022 and exempt the purchase tax on NEVs for 2021 and 2022. The country's production and sales of power batteries and NEVs in January-June both hit new highs aided by the incentives.</p><p>Total output of power batteries rose to 74.7GWh in January-June 2021, <a href="https://metals.argusmedia.com/newsandanalysis/article/2233174">up by 217.5pc</a> on the year. Installed volumes increased by 200.3pc to 52.5GWh in the first half of 2021, according to data from the China Automotive Manufacturers Association.</p><p>Downstream NEVs output <a href="https://metals.argusmedia.com/newsandanalysis/article/2232751">rose by 200.6pc</a> to 1.215mn in the first half of 2021 on the year. Sales soared by 201.5pc to 1.206mn units in the first half of 2021, similar to sale levels for the entire 2019, according to the CAAM data.</p></article>
