Global Ni supply, demand growth likely in sync in 2022

The world's nickel supply and demand growth is very likely to be in sync in 2022, given the development of new projects on both the nickel production and consumption sides.

This is according to Yang Bo, a nickel expert at the Xiangyu Group Research Institute, who spoke at the Nickel and Cobalt Annual Conference 2021, held by information provider Antaike over 1-4 November.

The growth next year from both the supply and demand sides is expected to be about 300,000-350,000t. The supply increase mainly comes from Tsingshan's nickel matte project in Indonesia, Huayou Cobalt's nickel-cobalt mixed hydroxide precipitate (MHP) projects in Indonesia and Ningbo Lygend's Indonesia MHP plant. As for demand, the majority of the growth will be generated from the new energy battery materials and stainless steel sectors. Global primary nickel production came in at 2,494,100t in 2020 against the usage figure of 2,386,000t, International Nickel Study Group data shows.

An estimated stainless steel production growth of 5pc in China in 2022 will bring in around 100,000t of demand for products with high nickel content, while the nickel-containing power battery sectory is expected to create 150,000-200,000t of nickel demand next year, Yang said.

Ningbo Lygend's two MHP production lines in Indonesia, which have a combined total capacity of 36,000 t/yr, started operations in March and October respectively. Huayou Cobalt's Indonesia MHP projects are expected to reach their full production capacity of 60,000t in 2022. The company will complete equipment adjustments later this year and then begin commercial production. Tsingshan has postponed 100,000 t/yr of nickel matte shipments from Indonesia from October to December delivery, Argus learned at the conference.

"The nickel market in 2022 to a great extent is in a balanced state with growth from supply and demand on par. That will correct this year's forecasted 60,000-100,000t of supply deficit," a market source told Argus.

Argus' assessment of domestic nickel sulphate prices rose to a record high at 37,000-38,000 yuan/t ex-works on 27 July on strong demand and low availability. Prices fell to Yn35,500-36,500/t on 4 November as there were high imports over the past few months and lower demand after downstream production cuts resulting from power curbs weighed on prices.

China's nickel sulphate imports during January-September 2021 skyrocketed by 800.4pc to 32,773t from 3,640t in the same period last year. MHP is a key intermediate feedstock for new energy battery material nickel sulphate. China's imports for MHP rose by 33.2pc to 294,020t in January-September 2021, up by 33.3pc from 220,665t in the same period in 2020.