NPI Prices to Rebound in December after Being Dragged down by Oversupply in November

SHANGHAI, Dec 14 (SMM) - As of November 30, the SMM prices of Ni 8-12% high-grade NPI stood at 1,355 yuan/mtu, down 30 yuan/mtu from the beginning of the month. Stainless steel mills rarely made inquiries in early November, and NPI prices went down in the second half of the month after guidance prices emerged. Following a brief recovery in October, the end demand declined again in November, weighing on the spot prices of stainless steel. Stainless steel mills suffered losses amid high NPI prices, and thus undertook maintenance or reduced their production, hurting the demand for NPI. However, nickel ore prices rose amid short supply in the rainy season, and coal prices also went up, offering certain cost support to NPI prices. On the supply side, the total output of NPI increased slightly in November when compared with the previous month, mainly contributed by the commissioning of new projects of integrated enterprises. In mid-November, the inflows of cheaper Indonesian NPI weighed on the domestic NPI prices.

In early December, the terminal consumption showed signs of improvement thanks to loosening domestic pandemic controls and Indonesia’s hike in nickel ore export tariffs. A small number of stainless steel mills are expected to resume their production, which may help drive down NPI inventory. NPI demand will receive a temporary boost from downstream stocking for the upcoming Chinese New Year. SMM expects high-grade NPI prices to climb to 1,340-1,380 yuan/mtu (ex-factory, tax included) in December.