Pure Nickel Supply Tightens, and NPI Downstream Demand Robust

SHANGHAI, Oct 13 (SMM) - On the supply side, the premiums of NIKKELVERK and Jinchuan nickel rose due to supply tightness. For NPI, the prices have been well supported by robust downstream demand. On the demand side, the spot prices of stainless steel in Wuxi and Foshan dropped slightly yesterday October 12, especially those in Wuxi, according to SMM research, After the National Day holiday, the demand for stainless steel posted a temporary improvement, mainly due to restocking activities by terminal players, but the transaction has been slightly thin recently. In the alloy sector, there still exists rigid demand for pure nickel, with rising consumption amount. To sum up, the upstream and downstream markets across the pure nickel chain are still weak and the prices are expected to move sideways in the near term. 

Pure nickel: In the spot market, Jinchuan nickel was quoted with premiums of 10,000-13,000 yuan/mt as of October 12, with an average of 11,500 yuan/mt, up 1,750 yuan/mt from a day ago. NORNICKEL nickel was quoted at premiums of 4,200-4,500 yuan/mt, with an average of 4,350 yuan/mt, flat from a day ago. SHFE nickel dropped in morning trade, and spot premiums of Jinchuan nickel rebounded slightly. But the spot prices of Jinchuan nickel fell, which failed to boosted market transactions. In terms of nickel briquette, the prices were 182,000-183,300 yuan/mt, an increase of 5,500 yuan/mt from a day ago.

NPI: As of October 12, SMM average price of 8-12% high-grade NPI was 1,335 yuan/mtu (ex-factory, tax included), up 7.5 yuan/mtu from a day ago. Market inquires and transactions were active with traded prices ranging 1,350-1,365 yuan/mtu (ex-factory, tax included). On the demand side, stainless steel production in September was about 2.76 million mt, a month-on-month increase of 21.10%. In October, the production lines of integrated stainless steel mills will be put into operation one after another, and steel mills are expected to further ramp up production. On the supply side, due to the impact of the pandemic, the production of some NPI plants was hindered, and the Indonesia NPI production was lower than expected. Therefore, the current increase in the overall supply of NPI is limited. It is expected that there will be a slight upward space in the price of NPI in the short term.

Stainless steel: The spot prices of stainless steel in Wuxi and Foshan dropped slightly yesterday October 12, especially those in Wuxi, according to SMM research, After the National Day holiday, the demand for stainless steel posted a temporary improvement, mainly due to restocking activities by terminal players, but the transaction has been slightly thin recently. In addition, a small-scale pandemic outbreak in the Dainan county, Jiangsu province restricted local transportation to some extent, while the production remained normal. In terms of cost, the prices of high-grade NPI have risen during the day trading. In the case of rising cost and increasing demand for NPI from steel mills, it is expected that the prices of NPI will continue to rise in the short term. The prices of ferrochrome continued to rise as well, and the demand from steel mills maintained growth. However, the tradable spot ferrochrome in the market was tight, and the bid prices offered by NPI plants rose. It is expected that the short-term ferrochrome price will remain strong. 

The prices of 304 cold-rolled coils moved between 16,900-17,200 yuan/mt, and the prices of 304 hot-rolled coils were between 16,200-16,600 yuan/mt. 316L/2B was reported at 27,800-28,600 yuan/mt in morning trade, 201/2B at 9,700-10,000 yuan/mt, and 430/2B at 7,800-8,200 yuan/mt. As of 10:30 am (Beijing time), the SHFE SS 2211 contract stood at 16,330 yuan/mt, and the spot premiums in Wuxi were 740-1,040 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)