[NPI Daily Review] Seller sentiment recovers on Indonesia production cuts and tender price support from major steel mills

SMM, September 24:

　　The SMM high-grade NPI market sentiment factor stood at 1.83, up 0.05 MoM. The upstream sentiment factor for high-grade NPI was 1.93, up 0.08 MoM, while the downstream sentiment factor was 1.72, up 0.01 MoM. News of production cuts at Indonesian nickel pig iron due to water shortages drew market attention to supply contraction. Combined with large steel mills' tender prices being viewed by some market participants as a phased bottom reference, trader sentiment stabilized somewhat. Sellers showed stronger willingness to hold prices firm, and upstream sentiment recovered notably faster than downstream. However, the actual impact of production cuts on subsequent supply still depends on their duration and the pace of production recovery. In terms of transactions, some steel mills and traders recently purchased at low prices, with individual orders reaching 10 kt in scale, reflecting certain procurement demand at current price levels, but not yet enough to confirm a rebound in transaction center. There were also relatively high-priced deals in the market. Given differences in grade and delivery terms, downstream acceptance of price increases remains to be seen. On the demand side, some steel mills restocked at selected prices, while some large mills mainly digested existing inventory ahead of the holiday and had no new procurement plans, so a broad restocking trend has not yet formed. Overall, supply-side production cut news and large steel mills' tender prices jointly supported market expectations, but downstream purchasing remained cautious. In the short term, the tug-of-war between sellers holding prices firm and buyers pushing for lower prices will continue. Going forward, attention should be paid to the implementation of Indonesian production cuts, stainless steel finished product digestion, and the pace of post-National Day holiday restocking.