LONDON (Reuters) – China’s Ministry of Finance made some minor but significant tweaks to its nickel import tariffs at the start of this year.
The import duty on melting-grade nickel cathode was doubled from 1 percent to 2 percent, while that on nickel sulphate was cut from 5.5 percent to 2 percent. Why the differentiation?
The reason is that nickel sulphate is a form of the metal highly suited to the production of precursor battery materials. China, already a leader in the electric vehicle (EV) battery sector, is evidently laying the ground for stimulating imports of nickel in the most readily usable composition for lithium-ion battery processing.
Batteries are still a relatively small part of nickel’s usage profile, representing about 4 percent of global demand, according to the International Nickel Study Group.
But everyone knows that ratio is only going to increase as the electric vehicle revolution builds momentum. As it does, however, it could fragment an already cracked market, both in terms of the supply chain and pricing.