Trading Sentiment between NPI and Stainless Steel mills Stagnant

SHANHAI, Jul. 15 (SMM) -- Although LME nickel price surged above USD 24,000/mt last week, mainstream traded prices of high grade NPI (10-15%) did not advance significantly, with prices in the RMB 1,600-1,620/mtu range, only up by RMB 450/mtu. Although some NPI producers raised offers to RMB 1,650/mtu, most downstream stainless steel mills only accept prices between RMB 1,600-1,620/mtu.

SMM conducted a survey on NPI producers and stainless steel mills. Based on result of SMM survey on NPI producers, sluggish sentiment in NPI market improved to certain extent, and transactions for NPI also improved slightly. Meanwhile, orders also improved, with some high grade NPI producers even reported full orders in July, and tight supply of high grade NPI gradually appeared. In this context, most market insiders believe that prices of high grade NPI will not fall in the near term.

Some NPI producers in Inner Mongolia, Jiangsu and Liaoning provinces reported good orders. According to some producers, supply of NPI was relatively tight, and they were mainly delivering previous orders. Producers still adopted a wait-and-see attitude for pricing of coming orders and ceased to quote offers temporarily.

Based on result of SMM survey on stainless steel producers, most stainless steel mills believe that this round of rebound is a compensation of previous excessive decline, and approximately 50% surveyed companies were not optimistic towards LME nickel price outlook. Around 30% surveyed companies believe that current LME nickel prices have reversed downward trend, and will have room to advance significantly. The remaining 20% surveyed companies were puzzled towards LME nickel price outlook. Players’ views in NPI market were still divided, so stainless steel mills were cautiously and were not active to make purchase.

Given that both suppliers and purchases adopted a wait-and-see attitude, NPI prices will not climb significantly. SMM expects NPI market will not become bullish until the end of stainless steel low-demand period.