SMM Nickel Brief: High-Grade NPI Market Sentiment Stagnant, Downstream Caution Prevails

Five major Japanese steel associations issued a joint statement criticizing the EU's new steel import regime effective July 1, which has significantly curtailed market access for Japanese steel. The new system roughly halves total TRQs from the previous safeguard regime and raises the out-of-quota duty to 50%, reducing Japan's country-specific quota to approximately 800,000t — well below its 2022-2024 average annual EU exports of around 1.5 million tonnes. The associations also criticized the EU's September 2025 final anti-dumping duties on Japanese hot-rolled flat steel, arguing that the investigation failed to adequately account for the trade-restrictive impact of the July 2024 safeguard tightening, and expressed concern over a separate ongoing AD investigation into cold-rolled flat steel. Describing the measures as inconsistent with the Japan-EU EPA and potentially in breach of WTO rules, the associations urged the Japanese government to pursue early resolution through available dispute settlement mechanisms.

According to European Commission data, just three days into the new July 1–September 30 quota period, import quotas for multiple steel product categories allocated to Turkey, China, South Korea, India, and "other countries" have already been exhausted. Turkey breached quotas across the widest range of categories, including HRC (1A), metallic coated sheets (4A/4B), organic coated sheets, rebar, wire rod, gas pipes, hollow sections, and other welded pipes, with volumes awaiting customs clearance far exceeding allocated limits. China exceeded quotas for electrical steel, metallic coated sheets (4B), and other welded pipes; South Korea exhausted its organic coated sheets quota; India used up its full allocations for stainless bars and light sections (23,139t) and gas pipes (10,036t), with 29,299t and 13,666t respectively pending clearance. Residual "other countries" quotas for HRC (1A) and metallic coated sheets (4B) were also exceeded. Products awaiting clearance beyond exhausted quotas will be subject to the 50% out-of-quota duty.

Chinese Taiwan's upstream stainless steel producers Yusco and Tang Eng Iron Works issued flat July price lists, drawing a line under the consecutive price hikes seen earlier this year. The decision reflects a stronger US dollar, notable New Chinese Taiwan dollar depreciation, and recent adjustments in global nickel values, with LME nickel resting at around US$16,500/ton. Key raw material costs including nickel pig iron and international stainless steel scrap remain elevated, while rising global freight rates add further financial pressure. As the industry enters the traditional Q3 slow season, buyers hold sufficient inventory from first-half purchases, limiting restocking demand. Mills are maintaining steady pricing to balance high input costs against quieter summer market conditions.