The average SMM 10-12% high-grade NPI price increased WoW by 4.5 yuan/nickel unit to 1,135.8 yuan/nickel unit (ex-factory, tax included), and the average Indonesia NPI FOB index price increased WoW by $0.63/nickel unit to $146.39/nickel unit. This week, the high-grade NPI market was choppy, trading was weak, and there was no clear unilateral trend. Futures fluctuations drove repeated shifts in market sentiment, and overall a strong wait-and-see sentiment prevailed, with transactions continuing to struggle to achieve significant volume. Most forward trades were executed based on average prices.
Supply side, suppliers’ willingness to hold prices firm remained relatively stable this week. Market sentiment fluctuated slightly along with futures movements. The overall supply order was stable, with no significant concentrated price concessions or sharp price adjustments. However, as the wait-and-see sentiment intensified, resistance to making shipments periodically increased. Some traders turned bearish, with a small amount of low-price selling. Demand side, downstream end-users maintained a cautious and conservative purchasing stance overall, with weak purchasing willingness and a strong wait-and-see sentiment. The procurement pace was relatively slow, dominated by essential purchases, and acceptance of high-priced supply was low. There were no concentrated restocking or large-scale purchasing activities. The lack of follow-through from end-users was the core reason for the persistent pressure on market transactions this week. Overall, the pattern of supply-side price holding and demand-side caution continued to wrestle. Coupled with repeated futures disruptions and a gradual recovery in supply, the industry lacked substantive positive drivers. The market consistently maintained a weakly consolidating trend, and in the short term, it is highly likely to remain in a tug-of-war between sellers and buyers with mediocre transactions.
Regarding the conversion of NPI to high-grade nickel matte, the discount of high-grade NPI relative to refined nickel narrowed this week. During the week, spot high-grade NPI prices consolidated in line with futures, with overall spot trading weak. The average discount of high-grade NPI against refined nickel narrowed slightly to 171.1 yuan per nickel unit. Next week, refined nickel prices are expected to have room for decline, high-grade NPI prices are likely to maintain a consolidating trend, and the discount is expected to narrow further. By comparison, directly producing high-grade NPI remains more economical.
This week, the smelting cost of high-grade NPI in China rose. Philippine nickel ore prices remained stable, but auxiliary material prices increased, pushing up domestic smelting costs. In contrast, in Indonesia, nickel ore prices continued to decline this week, dragging overall smelting costs further lower. The smelting cost gap between China and overseas widened again, and Indonesian production areas reestablished cost advantages. After the cost structure changed, smelter profits in Indonesia recovered further, and the production economics of overseas regions became prominent again, with the divergence in profitability between China and overseas reappearing.
![[SMM Analysis] Indonesian nickel ore quota headlines whipsaw China's stainless futures](https://imgqn.smm.cn/usercenter/WNjzM20251217171732.jpeg)
