SMM analysis on China June NPI output and July forecast

In June, China's NPI production was 28,100 mt in metal content (+3.51% MoM) and 666,000 mt in physical content (-2% MoM). Among these, the production of high-grade NPI was approximately 213,000 mt in physical content and 21,400 mt in metal content (+1,300 mt MoM); the production of low-grade NPI was approximately 453,000 mt in physical content and 6,700 mt in metal content (-300 mt MoM). Some smelters resumed production, while integrated steel mills, affected by the decline in stainless steel prices, preferred external procurement, leading to a decrease in production. Additionally, the use of high-grade nickel ore by domestic smelters increased, driving up the NPI grade, resulting in a structural change where physical content decreased but metal content increased.

It is expected that in July, China's NPI production will be approximately 28,500 mt in metal content (+1.54% MoM) and 693,000 mt in physical content (+4.08% MoM). According to the SMM survey, in July, NPI smelters will show stronger production enthusiasm, driven by high stainless steel production and the lack of significant increase in Indonesian NPI. Integrated stainless steel mills are expected to reduce high-grade NPI production due to high costs. Overall, it is expected that domestic NPI will continue to increase in July.