This week, the high-nickel pig iron (NPI) market has seen a steady rise in prices. According to the latest data, the weekly average price of SMM 8-12% high-nickel pig iron reached 944.2 RMB per nickel point (ex-factory, including tax), up 3.1 RMB per nickel point compared to last week. Meanwhile, the Indonesian NPI FOB index increased by 0.5 USD per nickel point from last week, reflecting the market's continued bullish confidence in high-nickel pig iron prices.
On the supply side, there have been some positive changes in the domestic market. With the end of the Spring Festival holiday, major smelters have gradually resumed operations after maintenance, bringing production back to relatively normal levels. However, due to the reduced number of production days this month, the increase in output has been somewhat limited. Meanwhile, in Indonesia, overall production has declined due to fewer production days and adjustments in the production pace in some areas.
On the demand side, although the stainless steel market has experienced fluctuations after the holiday, the performance in the spot market has been relatively stable. The long-term contractual orders of stainless steel plants have made spot purchasing intentions weak. Nevertheless, the market outlook remains optimistic, with some traders beginning to stockpile goods, further pushing up market prices, and enabling high-nickel pig iron prices to maintain a trend of steady strength in the short term.
The price differential between high-nickel pig iron and electrolytic nickel was also adjusted this week. The average discount of high-nickel pig iron compared to electrolytic nickel narrowed to 310.17 RMB per nickel point, a decrease of 9.4 RMB per nickel point from last week. Moreover, market inquiry activities have been active, with some transaction prices reaching recent highs, thereby raising the market focus.
Simultaneously, international news has also contributed to price fluctuations. The Philippine Senate passed a bill banning the export of raw ore, a policy similar to Indonesia's previous approach, affecting market sentiment and causing prices to fluctuate upwards. On a macro level, the U.S. January ADP employment data exceeded market expectations, with good overall economic performance, which warmed market sentiment and benefited base metals.
In the coming period, high-nickel pig iron is expected to continue its upward trend amid limited resources. In contrast, the price of pure nickel will need to pay attention to the upcoming U.S. non-farm employment data release to see if it exceeds expectations and possibly leads to price adjustments. Overall, the price discount between high-nickel pig iron and electrolytic nickel is likely to continue narrowing.
From an economic cost perspective, the cash cost losses for smelters narrowed this week at the current nickel ore price level. As the auxiliary materials market has not fully recovered post-Spring Festival, prices for these materials remained relatively stable this week. Meanwhile, in the mining sector, the Philippines, still in its rainy season, has limited shipments, keeping nickel ore prices firm, supporting the increase in high-nickel pig iron prices.
Looking into next week, it is expected that environmental policies promoting carbon reduction may lead to a correction in auxiliary material prices. Moreover, the strong trend in nickel ore prices is likely to continue, and with market sentiment driving up prices further, high-nickel pig iron prices may strengthen, thus further alleviating the loss margin of smelters.
![[SMM Nickel Midday Commentary] On March 26, influenced by expectations surrounding the policy of “Indonesia's proposed levy of a nickel export tax,” nickel prices rose significantly](https://imgqn.smm.cn/usercenter/CjEnN20251217171733.jpg)
