In May, the national NPI production in China was 27,200 mt in metal content (+1.54% MoM) and 680,000 mt in physical content (+4.99% MoM). Among them, high-grade NPI production was about 204,000 mt in physical content and 20,100 mt in metal content (-100 mt in metal content); low-grade NPI output was about 442,000 mt in physical content and 7,100 mt in metal content (+500 mt in metal content). In May, some NPI smelters resumed production. The increase in the domestic 300-series stainless steel production expanded, leading to a short-term active demand. Additionally, the price of high-grade NPI rebounded in May, alleviating the losses of domestic NPI smelters and enhancing production enthusiasm. From the perspective of integrated steel mills, high-grade nickel ore prices stayed high amid the unclear Indonesian RKAB approval in May, leaving a weakened cost advantage of producing stainless steel from high-grade NPI based on the RKEF process. Therefore, NPI production declined, and some integrated steel mills increased their external procurement of high-grade NPI. Affected by nickel ore prices and the disturbances in Indonesian nickel ore policies, domestic NPI output increased limitedly.
Entering June, the national NPI production is expected to stand at about 27,400 mt in metal content (+0.89% MoM) and 675,000 mt in physical content (-0.77% MoM). According to the SMM survey, some smelters in North China are expected to resume production in June, and those in East and South China are expected to increase production. As the impact of environmental inspections in some regions ended in May, NPI production is expected to return to normal in June. For integrated steel mills, the production of high-grade NPI using the RKEF process is still estimated to decline due to inferior stainless steel cost-effectiveness.
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