China's nickel sulphate imports increased in 2020, supported by rising demand from the new energy vehicle (NEV) industry despite the impact from the Covid-19 outbreak in the first quarter of the year.

The country imported 5,566t of nickel sulphate in 2020, up by 30.1pc on the year, according to customs data. December imports were 803t, down by 30.5pc from a year earlier because of delivery delays during the second wave of coronavirus infections outside of China.

Firm demand from the NEV power battery industry, particularly for nickel-cobalt-manganese/nickel-cobalt-aluminium (NCM/NCA) batteries, was the main driver of China's higher nickel sulphate consumption.

Consumers increased use of imported material in the past year as domestic output was mostly committed to long-term contracts, leaving limited spot inventories at major producers.

Argus expects new nickel sulphate projects outside of China to attract more interest from Chinese consumers in 2021, owing to rapid developments in the country's NEV industry and tightening domestic supply.

China has removed nickel-related products from a list of commodities that are prohibited from toll processing trade and cut the import tax on "other non-alloy nickel", under HS code 75021090, to 1pc in 2021 from 2pc in 2020. These two changes are expected to boost China's nickel imports in the long term.

Argus last assessed import prices for nickel sulphate at $3,100-3,500/t cif China on 19 January, unchanged from a week earlier, with some consumers enquiring for small volumes at around $3,100/t cif.