Nickel&Cobalt Industry Events 2024

1 Ministry of Industry and Information Technology: Increase support for domestic lithium, cobalt, nickel  and other mineral resources

On November 6, 2024, the Ministry of Industry and Information Technology publicly solicited comments on the high-quality development action plan for the new energy storage manufacturing industry (draft for comments), which mentioned strengthening the utilization of resources. We will increase support for the exploration of domestic lithium, cobalt, nickel and other mineral resources, invest mining rights in a scientific and orderly manner, and enhance the ability to secure domestic resources. Guide domestic enterprises to arrange overseas resource projects in a diversified, orderly and coordinated manner, and reduce the cost of resource development and transportation. On the premise of preventing risks, we will support enterprises to strengthen overseas investment cooperation and enhance the capacity of overseas mineral development and supply. Encourage production enterprises to do a good job in the whole life cycle management of new energy storage products during the research and development stage. Strengthen the green design of products, improve the product easy to recycle, easy to use. Under the premise of meeting the product performance requirements, support the production enterprises to use recycled raw materials.

2 The Ministry of Finance and the State Administration of Taxation adjusted the export tax rebate to cope with the new situation

At the end of 2024, Trump returned to the White House and once again raised the big stick of tax increase, claiming to impose 60% tariffs on Chinese goods. On October 29, 2024, the European Commission made a final ruling, deciding to impose countervailing duties on Chinese electric vehicles for a period of five years, with tax rates ranging from 17% to 35.3%.

In November 2024, the Ministry of Finance and the State Administration of Taxation issued a notice on adjusting the export tax rebate policy, reducing the export tax rebate for photovoltaic, lithium batteries and other commodities from 13% to 9%. Specific lithium battery products involve lithium-ion batteries, lithium primary batteries and original battery packs, other batteries, etc., and the announcement will be implemented from December 1, 2024.

For industries with global competitiveness such as lithium and photovoltaic, reducing the export tax rebate rate has a relatively small impact on the industry, which is conducive to keeping the profit of price competition in the country, reducing overseas financial subsidies through domestic finance, reducing the financial burden of the state, and directly benefiting enterprises with overseas production capacity layout. However, those enterprises with low technical level, low production efficiency and weak cost control ability may be eliminated by the market in the future!

3 RKAB approval pace restricts Indonesian nickel ore supply

The Indonesian RKAB (Rencana Kegiatan dan Anggaran Biaya), the work plan and budget report of Indonesia's mining and coal mining operations, has had a significant impact on Indonesia's nickel ore supply. Since the third quarter of 2023, Indonesia has cancelled the simplified approval process, changing the previous one year batch to three years batch, and the approval progress has slowed down.

As of mid-October 2024, after the approval of the new quota of 16 million tons of Weda Bay Nickel, the total mining quota in Indonesia in 2024 will reach 275 million wet tons, and the mining quota in 2025 and 2026 will reach 250 million wet tons and 230 million wet tons, respectively. Indonesia's smelting and processing capacity will continue to grow, and the periodic shortage of nickel ore may affect the market's supply expectations, which may trigger price volatility.

In 2024, Indonesia's nickel mine production accounted for 61% of the world, an increase of 6 percentage points from 2023. The Indonesian government is trying to increase its pricing power in the international market by controlling nickel supply.

4 Luoyang Molybdenum industry in 2024 cobalt wet process intermediates will exceed 80%

In 2024, the production of cobalt wet process intermediates of Luoyang Molybdenum Industry will reach 100,000 tons, an increase of 80%. Luoyang Molybdenum holds 80% interest in the TFM copper-cobalt mine and 71.25% interest in the KFM copper-cobalt mine. Up to now, TFM has 5 production lines with a capacity of 450,000 tons of copper and 37,000 tons of wet process intermediates; KFM has a production line with a production capacity of 150,000 tons of copper and 50,000 tons of cobalt wet process intermediates.

5 Global high cost nickel capacity cleared

In 2024, global primary nickel production reached 3.516 million tons, with China and Indonesia accounting for 76%, an increase of 5 percentage points over 2023.

With the exception of Indonesia and China, nickel production is stable or even declining. Indonesia's low-cost supply has accelerated the removal of high-cost nickel production capacity overseas, and Antaike statistics about the reduction of 94,000 tons of primary nickel overseas in 2024, including 40,000 tons in Oceania, 18,000 tons in Asia, 8,000 tons in Europe, 18,000 tons in the Americas, 10,000 tons in Africa, and China's NPI reduction of nearly 70,000 tons. The liquidation of NPI capacity in China and the reduction of production in overseas projects offset some of the increase in other nickel products in China and Indonesia. Global primary nickel production is further concentrated in Central Indonesia.

6 The global production capacity of electric nickel and electric cobalt is growing rapidly

Due to the large price difference between nickel, cobalt metal and salt, Chinese enterprises have actively put into production electric nickel and electric cobalt production capacity since 2023. According to Antaike statistics, in 2024, China's electric cobalt production capacity is about 65,000 tons, an increase of 63%, and the total output of electric cobalt is expected to reach 45,000 tons, an increase of 114%, a record high; In June 2024, Liqin's 6,000 tons of electric cobalt production line in Indonesia was put into operation.

In 2024, China's electric nickel production capacity reached about 400,000 tons, and the output was about 326,000 tons, an increase of 39.3%. At the same time as production growth, companies actively registered their brands on the LME and the previous period. In 2024, the LME will add 125,000 tons of nickel delivery capacity within the year, all of which are Chinese-led enterprises, including Huayou Cobalt Industry "HUAYOUgx" 30,000 tons, Jingmen Green Mei New Materials Co., Ltd. "GEM-NI2" 20,000 tons, Zhongwei Shares "CNGR" 25,000 tons and "DX-zwdx" 50,000 tons (Indonesia). With the exception of "DX-zwdx", other production capacities were registered in the previous period.

In 2025, the production capacity of nickel and cobalt in China and Indonesia will continue to grow, resulting in the price spread of nickel, cobalt metals and salts will gradually narrow.