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From the supply side, in the domestic market, the continuous increase in nickel ore prices has led to higher production costs domestically. Additionally, the low inventory of raw materials limits production drive, keeping domestic output stable. Meanwhile, in Indonesia, heavy rains have severely affected the Morowali Industrial Park, causing significant flooding, although pyrometallurgical plants have not been significantly impacted, allowing overall Indonesian output to maintain modest growth.
On the demand side, stainless steel social inventory is being depleted at a slow pace, leading to lukewarm procurement interest from stainless steel plants for raw materials. However, traders remain optimistic about the future market, prompting large-scale purchasing this week, which has further tightened the availability of high-nickel pig iron resources. In the short term, high-nickel pig iron prices are expected to continue their stable and strong trend.
Moreover, this week, the average discount of high-nickel pig iron to electrolytic nickel was 273.05 yuan per nickel point, narrowing by 12.55 yuan per nickel point compared to last week. Due to tight market resources and rising cost expectations, high-nickel pig iron prices have further increased this week.
In the pure nickel market, due to significant macro-level uncertainties involving tariffs and geopolitical factors, there was a trend of prices initially declining and then rising for base and precious metals within the week, causing nickel prices to fluctuate. On the news front, flooding in Indonesia affected the hydrometallurgical project production in the Morowali Industrial Park, leading to an expected increase in pure nickel costs and strengthening previously declining pure nickel prices.
In the short term, the cost support for high-nickel pig iron is expected to further strengthen, while supply remains tight due to limited mineral resources, suggesting continued strong price trends. Looking forward, U.S. tariff developments might strengthen, benefiting the base metal market, and nickel prices are likely to continue their upward correction. From the cost side, increases in ore prices and intermediate product factors may push the cost line for pure nickel further up. Next week, the average discount of high-nickel pig iron to electrolytic nickel is expected to narrow slightly.
On the raw material front, this week, auxiliary material prices were negatively impacted by the continued weakening of downstream black steel prices, leading to further declines in thermal coal and coke prices, thus lowering the auxiliary cost line for high-nickel pig iron smelting plants. For minerals, 25 days ago the Philippines was still in the rainy season, with limited supply from some mines keeping prices relatively stable. This week, smelting plant profits have mostly recovered.
Next week, auxiliary material prices may continue to show a weak trend. However, nickel ore prices may see a slight increase, and as such high-nickel pig iron prices might continue to rise supported by costs, though the room for increase is limited; the profits for high-nickel pig iron smelting plants may slightly weaken.
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