In February 2025, the price spread between high-grade NPI and refined nickel experienced some changes. Specifically, the average discount of high-grade NPI to refined nickel reached 276.43 yuan per mtu, narrowing significantly by 45.72 yuan per mtu compared to the previous month. Throughout February, although the price spread fluctuated, it showed an overall narrowing trend, while refined nickel prices gradually declined amid volatility.
On the news front, Indonesia introduced new approvals and increased output for nickel ore in February. This policy development alleviated market concerns over tight nickel ore supply, weakening trading sentiment and causing futures market prices to decline amid fluctuations. Meanwhile, from a macroeconomic perspective, the US underwent significant policy changes in February, with newly inaugurated President Trump aggressively advancing import and export tariff policies, intensifying volatility in the international commodity market. The US Fed's monetary policy direction also failed to instill confidence in the market, and the weakening of interest rate cut expectations further dampened the outlook for the non-ferrous metals market. The withdrawal of some funds exerted considerable pressure on nickel prices.
Supply side, Indonesia's high-grade NPI supply underwent management optimization in February, but production on some production lines declined significantly. Additionally, the ongoing tight supply of nickel ore led to a reduction in metal content for the month. Domestically, many smelters depleted their nickel ore inventories, and some production lines entered maintenance, impacting production levels. Nevertheless, the downstream stainless steel industry, particularly top-tier enterprises, saw a slight increase in production, which to some extent boosted demand for high-grade NPI.
Entering March 2025, market news emerged that Indonesia would introduce new policies on nickel ore and related products. These measures could tighten nickel mining activities, providing support for nickel prices. Currently, the main raw material, high-grade nickel matte, is facing temporary production cuts, which will raise the production cost baseline for refined nickel, thereby strengthening cost support. At the same time, the supply of high-grade NPI remains slow to recover due to Indonesia's production decline, coupled with robust downstream demand during the traditional peak season. It is expected that high-grade NPI prices will continue to show strong upward momentum in the short term. Therefore, overall, the average discount of high-grade NPI to refined nickel in March may widen again.
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