Jiangsu winter curbs to have no impact on NPI, #300 stainless steel output

"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.

China's stainless steel imports were 224,000 mt in April, an increase of 10.13% month-on-month and 95.9% year-on-year; exports (excluding stainless steel products) were 410,500 mt, an increase of 24.85% month-on-month and 31.09% year-on-year. The total stainless steel exports were 498,400 mt.

The low-end traded prices of #304 cold-rolled products stood at 15,700-15,800 yuan/mt. Commodities prices surged on Thursday evening with nickel leading price gains.

The nickel industry is in the limelight in the non-ferrous metals commodities market since 2020, as demand and supply fundamentals have become more volatile.

Last month, output of NPI in China extended its downtrend that began since November 2019, decreasing 4.46% from March to 40,200 mt Ni, some 12.25% lower than the same month a year ago, showed SMM data.

Industrial activity levels outside of central China continues to improve as workers return from quarantine periods and logistics pressures eased.