Battery applications are a major driver in new demand for nickel in China, outpacing growth in the metal's main market, stainless steel, China Nonferrous Metals Forum in London heard.
In 2017 power cells for domestic new energy vehicles are estimated to be consuming about 10,000t of nickel. But this will rise to 42,000t in 2020 and 150,000t in 2025, according to research institute Antaike. Nickel consumption in lithium batteries has surpassed that in nickel metal hydride (Ni-MH) batteries since 2015 and is growing at a faster pace.
China's production capacity for intermediate battery chemical nickel sulphate will reach 440,000t in 2017, with output set to reach 300,000t, a 50pc increase against last year, Xu Aidong, chief analyst, Antaike Cobalt Branch said.
Of this output, 64pc is using as a primary raw material, concentrates, while 20pc comes from recycled scrap units and 16pc from nickel briquette, he said. Jinchuan, Jien, Jinke, Changyou, and GEM are major producers of nickel sulphate.
Batteries will continue to drive Chinese cobalt demand and Chinese companies are investing upstream and downstream. While it relies heavily on exports of concentrates from the Democratic Republic of Congo, China accounts for most of the global production and consumption of cobalt metal and chemicals.
China's cobalt cathode powder and salt production can meet domestic demand and supply the international market serving electric vehicles and consumer electronics.
Prices this year to date increased by 15pc for nickel, by 60pc for cobalt cathode and by 70pc for cobalt chloride year on year, Xu said.
This attracted investment in battery materials, and reignited interest in both nickel sulphate and laterite mining. In the first eight months of this year, nickel and cobalt mining and smelting companies in China generated profits of Yn3.3bn ($498mn) with revenue up 20pc to Yn206.8bn.
Nickel consumption in China is forecast to exceed 1.1mn t this year, up 3.8pc with stainless steel taking up 85pc of this demand and batteries only about 3pc. But while demand for nickel in stainless steel is growing at only about 3.3pc this year, the growth rate for battery demand is 44pc, Xu said.
Globally, stainless steel's share in nickel consumption will decrease to 62pc in 2025 from 68pc in 2015 while battery demand will increase to 10pc from 3pc, Antaike forecasts.
Stainless steel output in China is expected to be 25mn t in 2017, up 2.8pc year on year, half of that being 300 series chromium-nickel steel. China accounts for 53pc of global stainless steel output. In 2017, stainless steel apparent consumption in China is estimated at 20mn t, up 3.3pc.
In the first eight months of 2017 China imported 20.25mn t of nickel ore to feed its supply chain, up 8.1pc against the same period last year. Of that, 83pc came from the Philippines, the rest from Indonesia, New Caledonia, Guatemala and Turkey. But China's imports of nickel cathode were down 53pc in the same period to 134,00t because of a lower nickel price in China, Xu said.
At the same time, the country imported 991,000t of ferro-nickel and nickel pig iron (NPI) mainly from Indonesia and primarily produced by Chinese companies in the country, while the balance came from New Caledonia, Japan, Colombia and Brazil.
Import figures illustrate the NPI capacity transfer from China to Indonesia. China's primary nickel output is estimated at about 580,000t this year, down 4.3pc from 2016, of which NPI output accounted for 390,000t. Meanwhile output in Indonesia increased to 190,000t in 2017 from 90,000t in 2016.
But as battery demand outpaces that in stainless steel, Chinese investment is set to move from NPI to hydrometallurgical projects to produce high purity nickel units via high-pressure acid leaching of nickel ores and to nickel salts. The product mix will gradually change with development of new energy vehicles in the future, Xu said.
