Nickel price under pressure in 2020 – report – by Valentina Ruiz Leotaud (Mining.com – February 2, 2020)

https://www.mining.com/

A report by Wood Mackenzie argues that despite the global continued investment in new battery plants, weaker demand for nickel sulphate or NiSO4 tied to last year’s cut in Chinese electric vehicle subsidies will translate to more discounts in the metal’s price in 2020.

“We previously noted that premiums for NiSO4 might come under pressure due to stronger supply. While that did materialise, the unexpected and immediate mid-year downgrading in Beijing’s EV subsidy programme had a greater impact,” Wood Mackenzie’s Head of Nickel, Andrew Mitchell, wrote in the report.

“EV sales were reduced by half, China’s EV sales target of 1.5 million units was derailed and this cut demand for batteries and, therefore, precursor materials, including NiSO4. The impact will extend well into 2020.”

According to Mitchell, further discounts on NiSO4 are to be expected in the coming months and it is even possible that some sulphate refiners will switch a portion of chemicals output back to metal production.

“We believe the 27% surge in EV-related demand for nickel chemicals was exaggerated last year and that growth will be restricted to only 3-4% in 2020,” the expert said.

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