Ferronickel and NPI Imports in Nov Increased Despite Sluggish Market Demand

SHANGHAI, Dec 22 (SMM) - According to customs data, China imported 597,000 mt of ferronickel and NPI in November, up 11.19% MoM and 105.7% YoY. The import volume stood at 88,000 mt in nickel content, up 9.2% on a monthly basis and 81.5% on a yearly basis. Among them, the import volume of ferronickel rose by 29% on the month to 54,000 mt. The increase was driven by three factors. First, the domestic stainless steel plants had higher demand for ferronickel in November when they were busy restocking before the holiday. Second, stainless steel plants also preferred ferronickel as the NPI prices stood high in early November. Third, when nickel prices jumped in mid-November, the high-quality ferronickel that can be substitute for pure nickel became sought-after. NPI imports in November stood at 542,000 mt, or 72,000 mt in metal content, up by 11.3% over the month. As the terminal demand remained sluggish and the stainless steel prices were on the wane, stainless steel plants in Indonesia decided to cut the production due to lower profits. In contrast, NPI plants in Indonesia still gained high profits and maintained normal production. Therefore, the oversupply of NPI in Indonesia led to increasing flows of NPI to China.

In early December, NPI was in surplus due to weak terminal market and growing supply, which weighed on NPI prices. Later, the bullish macro factor improved the market sentiment and boosted the stainless steel futures prices. Therefore, some stainless steel plants gradually recover the production. In addition, as Chinese New Year approaches, stainless steel plants hold positive outlook for the post-holiday market and are enthusiastic about stocking up. As such, the excessive NPI supply is alleviated, and the NPI imports in December are expected to remain flat.