Altilium Group COO Orestes Trifilio shares his thoughts, 'The Nickel Matte process is like raping the resource, you waste a large portion of it and the process itself is far from clean. In fact it's so energy-intensive that it's a big contributor to greenhouse gases.If companies like Tesla are serious, they would not support the mass-production of Nickel Matte. However, sadly this plan might move forward due to market pressure. That would be a disaster.'
HANOI, March 4 (Reuters) - Chinese stainless steel and nickel giant Tsingshan Holding Group's decision to produce a large amount of nickel matte in Indonesia has eased investor concerns over battery-grade supply and pressured prices, industry analysts say.Nickel prices on the Shanghai Futures Exchange SNIcv1 dropped by its maximum limit of 6% on Thursday, after hitting a record high last month.London Metal Exchange nickel CMNI3, which hit $20,110 a tonne in February, the highest since 2014, fell by as much as 8.5%. MET/LTsingshan said on Wednesday it would supply 100,000 tonnes of nickel matte - an intermediate product that can be used to make both stainless steel and battery-grade nickel for electric vehicles (EVs) - to Huayou Cobalt 603799.SS and CNGR Advanced Material 300919.SZ within a year from October."News that Tsingshan will mass-produce nickel matte could be a game-changer," ING analyst Wenyu Yao said in a note."The risks of battery-grade nickel supply are much reduced. Until a new market equilibrium is found, exchange-traded nickel looks bearish in the short term," she added. A Tsingshan source, who declined to be named, said the company will convert laterite ore into nickel pig iron (NPI), which will then be processed to nickel matte.The conversion of stainless steel raw material NPI into matte is not a new process, but the market "was always ignoring this potential in the current price movements," said Wood Mackenzie research director Andrew Mitchell ."The process does not necessarily impact the (overall) supply-demand balance, but it could allow for faster development of the EV ternary sector, at least within China, if more suitable intermediate is available to produce nickel sulphates," Mitchell said. Nickel sulphate AM-22MIN-NISULF, used in lithium-ion EV batteries, is trading at 38,250 yuan ($5,914) a tonne, up 16.8% year-to-date and the highest level in Refinitiv Eikon data dating back to 2012.
CARBON FOOTPRINT AND HPAL IMPLICATIONS
The NPI-to-matte technology could face some challenges, experts said. "The NPI (for matte conversion) needs high-grade saprolite ore feed, which is limited. NPI for sale to stainless steel can use lower grade saprolite ore, so they are less exposed to this risk," independent consultant Steven Brown said. Another challenge that the NPI-matte conversion might face is the environmental footprint. "I am curious to see (EV maker) Tesla customers' reactions because NPI is very energy-intensive and currently uses coal power," said Brown, echoing Wood Mackenzie's Mitchell's concerns about wider adoption of the process as a result. The Tsingshan move is unlikely to affect the prospects of high-pressure acid leach (HPAL) nickel smelting projects in Indonesia, which are expected to provide economical and abundant battery-grade nickel once they start production. "HPAL can process limonite ore, which is readily available in Indonesia but also in the Philippines and New Caledonia," Brown said. "Over time, saprolite supply to NPI will become an issue, whereas HPAL can have a longer-term future. "Saprolite is formed from chemically-weathered rock formations. Saprolite and limonite are two types of laterite ore, the world's main nickel ore source. Both are found in top nickel miner Indonesia.($1 = 6.4676 yuan)Nickel nosedive: Tsingshan's matte move could suppress short-term priceshttps://tmsnrt.rs/3bYZnlfNickel sulphate priceshttps://tmsnrt.rs/3e5qZrG(Reporting by Mai Nguyen in Hanoi; Additional reporting by Min Zhang in Beijing and Tom Daly; editing by Barbara Lewis)
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