NPI Prices Fluctuated at High Levels in March due to the Extreme Price Moves of Nickel

SHANGHAI, Apr 14 (SMM) - In early March 2022, high-grade NPI prices were 1,495 yuan/mtu (ex-works, including tax).  Then NPI prices rose along with the soaring nickel prices to 1,630 yuan/mtu (ex-works, including tax) at the end of March, up 9%.

In March, due to the extreme price moves of LME nickel and SHFE nickel, the premiums of pure nickel over NPI once expanded to 120,000 yuan/mt in Ni content. As such, the downstream was forced to stop purchasing nickel-based raw materials and held a wait-and-see attitude. Accordingly, the trading in the market was slack. After that, LME set rules to control nickel trading. Although SHFE nickel prices fell from high, the spread between SHFE nickel and NPI was still large. Moreover, the tight supply of NPI, the import losses of pure nickel and ferronickel, and the shortage of raw materials in steel mills pushed up NPI prices.

At the beginning of April, NPI prices dropped slightly, and the traded prices stabilised between 1,630-1,650 yuan/mtu (tax included, delivery to factory). In addition, the falling nickel prices gradually narrowed the spread between NPI. Moreover, the poor downstream consumption of stainless steel weakened the upstream demand. The tight supply of NPI, however, eased later due to the increase in production of NPI plants boosted by the surging nickel prices. In addition, the severe pandemic in China hindered the production, transportation and demand of upstream and downstream, thus NPI prices are unlikely to rise. To sum up, demand in the NPI market was weak. With nickel prices returning to the fundamentals, the spread narrowed. NPI prices will trade between 1,550-1,630 yuan/mtu (ex-factory, tax included) in April.

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The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.