Nickel and Chromium Raw Material Prices Continued to Rise, While Stainless Steel Prices Failed to Keep Pace with Cost Increases Amid Off-Season [SMM Analysis]

This week, stainless steel spot prices rose slightly, but the increase was smaller than that of production costs, leading to a wider price inversion for stainless steel mills. Taking 304 cold-rolled products as an example, based on the current raw material prices, cash costs increased by 126.41 yuan/mt WoW, pushing the loss ratio to 6.11%. When calculated using raw material inventory costs, cash costs rose by 8.85 yuan/mt, with the loss rate remaining at 2.91%.

On the nickel-based raw material cost side, high-grade NPI prices continued their strong upward trend this week. A major domestic stainless steel mill announced its tender price for high-grade NPI, raising it to 940 yuan/mtu, which drove market offers higher and sustained the bullish momentum. Despite high smelting costs for high-grade NPI, expectations for production increases at stainless steel mills strengthened as the traditional September-October peak season approached, boosting anticipated demand for raw materials. Additionally, recent stainless steel price increases alleviated cost pressures for mills, keeping the high-grade NPI market firm. By Friday, prices for 10-12% grade high-grade NPI had risen by 11.5 yuan/mtu cumulatively, closing at 940.5 yuan/mtu. In the stainless steel scrap market, finished stainless steel prices, along with nickel and chromium prices, firmed up this week, while stainless steel scrap prices remained basically stable. However, compared to high-grade NPI, its cost-effectiveness remained at a disadvantage. By Friday, 304 off-cuts prices in east China were largely steady, with the latest offer around 9,750 yuan/mt.

For chromium-based raw material costs, Tsingshan announced its September tender price for high-carbon ferrochrome this week, up 300 yuan/mt (50% metal content) MoM to 8,295 yuan/mt (50% metal content), exceeding earlier market expectations and fueling bullish sentiment. Recently, retail supply of ferrochrome has been tight, with producers generally refusing to budge on prices. Additionally, transportation costs for some northern ferrochrome producers rose due to logistics constraints at Tianjin Port. Meanwhile, the seventh round of coke price hikes took effect, increasing ferrochrome smelting costs. The stronger-than-expected mill tenders further indicated robust expectations for production growth during the September-October peak season, signaling significantly higher demand for ferrochrome. However, overseas ferrochrome producers halted operations, and a major domestic ferrochrome plant reportedly cut production, exacerbating supply tightness and reinforcing market confidence in further price increases. By Friday, Inner Mongolia high-carbon ferrochrome prices had risen by 250 yuan/mt (50% metal content) cumulatively, closing at 8,275 yuan/mt (50% metal content).