SHANGHAI, Jan. 8 (SMM) – NPI prices failed to rebound at the end of 2012, even though LME nickel prices advanced. SMM believes that the sluggish demand amid bearish performance of stainless steel market is the major reason behind weak NPI prices.
Boosted by implementation of QE3 in the US, LME nickel prices and stainless steel both advanced slightly in August. During November, Greece successfully received bailout found and China and the US both reported upbeat economic data, which boosted long momentum and sent LME nickel prices higher.
However, when LME nickel prices rebounded in 2H 2012, NPI prices failed to advance along with LME nickel prices, and stainless steel mills were not hurry to purchase NPI. This was mainly due to soft demand from stainless steel mills, as they were under tight cash flow pressure at then end of year. Some stainless steel traders tried to move goods at low prices, but still failing to boost transactions.
In order to cut costs, stainless steel mills reduced purchases for raw materials and tried to clear inventories.
With regard to NPI price outlook in 2013, SMM believes the demand from stainless steel sector may improve as the NDRC and the Ministry of Railways approved some infrastructure projects in December 2012. If demand for stainless steel recovers, prices for NPI may advance.