Profits of Steel Mills are Compressed and Steel Mills are Less Willing to Purchase

Published: Dec 20, 2022 16:42

Source: SMM

Save

As of December 15, SMM Ni 8-12% high-grade NPI was 1,355 yuan/mtu (ex-factory, tax included), down 5 yuan/mt from the previous trading day.

SHANGHAI, Dec 20 (SMM) - As of December 15, SMM Ni 8-12% high-grade NPI was 1,355 yuan/mtu (ex-factory, tax included), down 5 yuan/mt from the previous trading day. Today, due to the continuous decline in the futures prices of stainless steel, the NPI factories continued to make concessions. On the supply side, the overall inventory declined due to the large number of transactions in the early stage. At present, the production of NPI plants remained normal, hence the spot supply was sufficient. However, since most of the Indonesia NPI was traded in the form of long-term orders, the retail transactions were thin. On the demand side, due to the poor consumption of stainless steel, the futures prices fell by more than 1,500 yuan/mt, and steel mills held a bearish outlook. In addition, the price of ferrochrome remained high recently, hence the profits of steel mills were continuously compressed. As such, the steel mills were less willing to purchase. It is expected that the demand for NPI will be weak. NPI prices are expected to remain volatile in the short term.

Market

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

14 hours ago

High-Grade NPI Smelter Profits Squeezed as Ore Prices Rise and Sales Prices Dip

[SMM Nickel Flash] Based on nickel ore prices from 25 days ago, smelter profits for high-grade NPI remained high this week. However, from the current raw material side, ore prices from both the Philippines and Indonesia increased, while auxiliary material prices saw a slight pullback, leading to an increase in the cash cost of producing high-grade NPI from spot ore. At the same time, high-grade NPI prices experienced some pullback, making it difficult for smelter profits to see sustained improvement.

14 hours ago

High-Grade NPI Prices Fall, Expected to Stabilize as Chinese New Year Approaches

[SMM Nickel Flash] This week, due to a sharp decline in futures triggering arbitrage selling, high-grade NPI prices fell significantly. However, after the selling activity subsided, upstream quotations and the market center gradually returned to normal levels, supported by cost factors. Looking ahead, as the Chinese New Year holiday approaches, market activity is expected to remain subdued, and high-grade NPI prices are projected to hover at highs with limited fluctuations.

14 hours ago

Nickel Prices Drop: SMM 10-12% High-Grade NPI Down 17.2 Yuan, Indonesia NPI FOB Index Falls 2.06 $/mtu

[SMM Nickel Flash] The SMM average price of 10-12% high-grade NPI fell 17.2 yuan/mtu WoW to 1,035.8 yuan/mtu (ex-factory, tax included), while the Indonesia NPI FOB index average price dropped 2.06 $/mtu WoW to 131.2 $/mtu. At the beginning of the week, futures hit limit-down, and nickel prices fell sharply WoW, driving the emergence of arbitrage supplies sold at low prices, leading to a significant decline in high-grade NPI prices.

14 hours ago