High-Grade NPI Cost Support Strengthens, Prices to Fluctuate Relatively Stable With Strong Trend in the Short Term [NPI Daily Review]

SMM reported on February 17 that

      on February 17, the average price of SMM 8-12% high-grade NPI was 965.5 yuan/mtu (ex-factory, tax included), up by 1 yuan/mtu compared to the previous working day. Supply side, domestically, Philippine nickel ore prices are expected to rise, pushing up the cost line for domestic smelters, which face the risk of expanding losses and are expected to operate at low production schedules. In Indonesia, a major production area has adjusted its production pace to reduce operating loads. Additionally, high-grade nickel ore resources in Indonesia are currently tight, with grades in major production areas generally declining, and metal content is expected to decrease. Demand side, stainless steel spot prices remained stable, market transactions were sluggish, and stainless steel mills, having stocked up inventories earlier and benefited from improved economics of stainless steel scrap, showed weakened demand for high-grade NPI. In the short term, the high-grade NPI market sentiment is expected to pull back. However, supported by costs and tight circulating resources, prices are still expected to fluctuate upward.