Stabilizing NPI Prices and Rising Demand Signal Strong Market Momentum

This week, the average price of SMM 8-12% high nickel pig iron (NPI) was 1001.7 yuan per nickel point (tax-included ex-factory), reflecting a decrease of 1.2 yuan per nickel point compared to last week. Meanwhile, the Indonesian NPI FOB index rose by 0.3 USD per nickel point from the previous week. Overall, transaction prices for NPI have shown signs of stabilization and a slight upward trend following a decline this week.

From the supply side, domestically, the stabilization of current NPI prices has alleviated the negative profit margins of smelters, thereby boosting production enthusiasm and showing a notable improvement compared to earlier situations. A slight increase in production is expected in September. In Indonesia, domestic nickel ore prices are fluctuating at high levels, resulting in persistently high production costs for smelters. Although there is new capacity coming online in Indonesia, the supply of raw materials is tight, limiting the growth.

On the demand side, major stainless steel enterprises continued to purchase according to their needs this week. With the traditional peak season for stainless steel approaching, stainless steel production is expected to increase as anticipated in September, directly driving up the demand for NPI.

In summary, the market currently has expectations of increased NPI supply; simultaneously, the downstream stainless steel industry is entering its traditional peak season with strong market expectations, leading to higher demand and active procurement by steel mills. The upward adjustments in nickel and stainless steel prices have boosted market confidence, and the price of NPI is expected to maintain a steady to strong trend in the near term.

Additionally, from a macroeconomic perspective, the global economic recovery and increased infrastructure investment are also contributing to the growth in demand for raw materials. Furthermore, policy support and heightened environmental requirements are making the NPI industry poised for significant development potential in the foreseeable future. Steel mills, being the primary downstream demand, show strong procurement intentions as the peak season approaches, which also stimulates upstream production activity. Overall, the NPI market is likely to demonstrate robust growth momentum in the short term, displaying a stable to upward trend under the combined influence of various market factors.