High-grade NPI price inches up on tight supply

"Interpreting Global Nickel and Indonesia Stainless Steel Industries: Supply-Demand Dynamics and Outlook"Stainless Steel Industries**

Indonesia produced 117,900 mt (Ni content) of NPI in March, up 3.51% MoM and 23.9% YoY. In Q1, output rose 19% YoY to 353,700 mt in nickel content. Caused by the limited RKAB approval, smelters are still purchasing nickel ore at a high premium. However, tight supply of nickel ore pushed raw material inventory to fall in March. Considering Lebaran in April, the output of high-grade NPI in April is expected to be 121,000 mt in nickel content, a slight increase of 2.66% MoM. If RKAB approval is still slower than expected, NPI output will be influenced in the future.

As of last Friday, the average price of 8-12% high-grade NPI was 954.8 yuan/mtu (ex-factory, including tax), down 3.2 yuan/mtu WoW. Supply side, even though the approved nickel ore quota is increasing, it still takes time for the nickel ore to move from the mine to the smelter. As a result, the current operating rate of NPI producers remains low. Stainless steel and stainless steel scrap prices kept dropping. High-grade NPI is still more cost efficient than stainless steel scrap. The terminal need for stainless steel stayed low, failing to boost the high-grade NPI prices. As a result, it causes a build-up in inventory and is expected to keep NPI prices low.

Recently, the conflict between Russia and Ukraine has caused many worries in the financial market. With the further aggravation of the situation, both domestic and foreign nickel prices have risen sharply, among which SHFE nickel prices have once again been set a record high.

China imported 4.01 million mt of nickel ore and its concentrate in November, a decrease of 10% from the previous month and a year-on-year increase of 12%, According to General Administration of Customs.

Shanghai base metals all cruised higher on Friday morning after the head of the Federal Reserve told Congress he saw no need to rush the shift towards tighter post-pandemic monetary policy. Meanwhile, their counterparts on the LME mostly cruised lower.

Shanghai base metals were mostly higher on Monday morning as investors digested a better-than-expected US jobs report. Meanwhile, their counterparts on the LME fell for the most part.

Shanghai base metals mostly cruised lower on Tuesday morning despite gains overnight on Wall Street that saw the S&P 500 and Nasdaq Composite touching fresh record closing highs. Meanwhile, their counterparts on the LME traded mixed.

Nonferrous metals on the SHFE were mostly higher on Thursday morning on a positive note following record gains on Wall Street after the US Federal Reserve’s policymaking committee voted to keep short-term borrowing rates near zero. Meanwhile, their counterparts on the LME also rose for the most part.

Shanghai base metals were mostly higher on Monday morning as investors reacted to last week’s US jobs report that trounced expectations and fueled hopes for a faster economic recovery. Meanwhile, their counterparts on the LME rose across the board.