High-Grade NPI Costs Remain Firm, Transactions Sluggish as Holiday Approaches [SMM Nickel Morning Brief]

1.21Nickel Morning Meeting Summary

Nickel Sulphate:

On January 20, the SMM battery-grade nickel sulphate index price was 26,534 yuan/mt, with the quotation range for battery-grade nickel sulphate at 26,310-26,990 yuan/mt, and the average price increased compared to the previous day.

Cost side, LME nickel prices rose today, widening cost support. Currently, the production of nickel sulphate from high-grade nickel matte and intermediate products is experiencing negative profit margins. Demand side, most precursor plants have completed nickel salt stocking for January, with only a small portion still requiring restocking. Spot order market inquiries remained sluggish. Some precursor plants are expected to sign February monthly contracts for nickel sulphate this week. Supply side, finished product inventories at salt plants are critically low, leading to tight supply. Overall, under the pattern of tight supply and rising costs, prices still have room for upward movement.

Nickel Pig Iron (NPI):

On January 20, SMM 8-12% high-grade NPI average price was 940 yuan/mtu (ex-factory, tax included), up 1 yuan/mtu from the previous working day. Supply side, domestically, high-grade NPI prices fluctuated downward, and domestic smelters remained in a loss-making phase, with production expected to decline slightly. In Indonesia, with the release of some new capacity and additional output from high-grade nickel matte conversion, high-grade NPI production is expected to increase slightly. Demand side, the stainless steel market is approaching the Chinese New Year holiday, with stainless steel spot prices remaining stable. Top-tier enterprises have sufficiently stocked raw materials before the holiday, while only some small and medium-sized stainless steel mills are making spot purchases. High-grade NPI demand has not shown significant recovery. Cost support for high-grade NPI remains firm, and in the short term, with the market nearing the Chinese New Year holiday, prices may still have room for recovery.

Stainless Steel:

On January 20, due to the significant return of Indonesian NPI, the daytime electronic trading session saw a wide decline, with a drop of 345 yuan compared to the previous day's closing price. Spot prices slightly increased, but transactions were sluggish as the market gradually entered the Chinese New Year holiday. 304 cold-rolled in Wuxi was quoted at 13,000-13,300 yuan/mt, 304 HRC in Wuxi at 12,400-12,600 yuan/mt, 316L cold-rolled in Wuxi at 23,600-23,800 yuan/mt, 201J1 cold-rolled in Wuxi at 7,600-7,750 yuan/mt, and 430 cold-rolled in Wuxi at 7,150-7,450 yuan/mt. SHFE 10:30 SS2503 contract price was 13,095 yuan/mt, with Wuxi stainless steel spot premiums at 75-375 yuan/mt (spot trimmed edge = mill edge + 170 yuan/mt).