During the week, the average price of SMM 8-12% high-nickel pig iron was 988.13 yuan per nickel point (ex-factory, including tax), an increase of 12.9 yuan per nickel point compared to the average price last week. At the same time, the Indonesia NPI FOB index rose by $1.1 per nickel point compared to last week. It is evident that the price increase of high-nickel pig iron after the National Day holiday is significant, showing a clear upward trend in the market.
From the supply side, domestically, due to the strong performance of nickel pig iron prices, the profits of smelters have improved, enhancing production motivation, which directly led to an upward adjustment in production expectations. Meanwhile, in Indonesia, entering October, the issue of reduced nickel ore supply due to previous rainfall has been alleviated, and the gradual release of new production capacity is also leading to an increase in production expectations.
On the demand side, the transmission of macro policies after the National Day holiday caused the spot price of stainless steel to fluctuate upwards. As the acceptance of stainless steel futures was relatively ideal, steel mills' demand for raw materials was released in a short period. Simultaneously, the relatively limited circulating bulk resources in the market led to continuously high transaction prices. In summary, the upward movement of stainless steel prices has fueled the rebound in high-nickel pig iron prices, and in the short term, supported by downstream demand, the high-nickel pig iron prices will continue to run strong.
On the other hand, within the week, the average discount of high-nickel pig iron relative to electrolytic nickel was 347.4 yuan per nickel point, expanding by 54.4 yuan per nickel point compared to last week. The high-nickel pig iron prices fluctuated and rose within the week, with the post-National Day spot price of stainless steel increasing significantly, coupled with improved demand, driving the strong performance of nickel pig iron prices.
Regarding pure nickel, during the National Day holiday, the nickel price on the London Metal Exchange was influenced by the Federal Reserve's interest rate cut and stronger-than-expected latest non-farm employment data, causing the price to surge and break through $18,000/ton. After the holiday, Shanghai nickel continued this macro uptrend, continuing to fluctuate upwards. In this context, the discount of high-nickel pig iron relative to electrolytic nickel further expanded during the week.
In the short term, monetary policy and potential further rate cuts by the Federal Reserve may continue to push up pure nickel prices. For high-nickel pig iron, due to the release of downstream demand, the price's strong trend is expected to continue. It is anticipated that next week, the discount of high-nickel pig iron relative to electrolytic nickel will further expand, but the magnitude may narrow compared to this week.
In summary, the current market shows a situation of strong supply and demand. The supply of high-nickel pig iron is steadily increasing both domestically and internationally, while the downstream industries such as stainless steel show strong demand for high-nickel pig iron. Coupled with favorable macroeconomic policies, the price of high-nickel pig iron is expected to remain strong in the short term. Market participants need to closely monitor monetary policy trends and changes in downstream demand, adjusting procurement and production plans in time to cope with the risks and opportunities brought by price fluctuations.
