This week, the average price of SMM 8-12% high-nickel pig iron was 941.9 yuan per nickel point (including tax, ex-factory), which is a decrease of 8.2 yuan per nickel point compared to last week. The price of high-nickel pig iron continues to face significant pressure.
From the supply side, domestically, with the increased arrival of Philippine nickel ore and some smelters resuming production after maintenance, output is expected to show a slight upward trend. In Indonesia, the domestic trade premium for Indonesian nickel ore remains stable, putting cost pressure on smelters. Due to the continuous decline in product prices, some smelters have reduced production, and the output of Indonesian nickel pig iron is expected to decline.
On the demand side, the easing of the China-US tariff conflict has somewhat revived the stainless steel market, with spot market activity picking up, although the increase in actual transaction prices is limited. The effect of policy transmission still needs time, and stainless steel plants have sufficient raw material reserves from earlier periods. The high-nickel pig iron market continues to weaken, and prices are expected to remain relatively weak in the short term. Additionally, the average discount of high-nickel pig iron to electrolytic nickel this week was 309.8 yuan per nickel point, expanding by 17.92 yuan per nickel point compared to last week.
In terms of pure nickel, new progress in the reciprocal tariff agreements between China and the US is expected to reduce the reciprocal tariff rates to 10% within 90 days. This positive news has driven nickel prices to fluctuate upwards. However, statements by Federal Reserve Chairman Jerome Powell have diminished expectations for rate cuts, adding uncertainty to the market and causing nickel prices to continue fluctuating. From the cost side, the premium on nickel ore remains strong, and tight supply of intermediates provides solid cost support for nickel prices, supporting the bottom of nickel prices within a fluctuating range. The expanded discount of high-nickel pig iron is mainly due to its weakening prices.
In the short term, the stabilization of stainless steel prices might provide some support for high-nickel pig iron, but with unresolved supply-demand conflicts, high-nickel pig iron prices remain under pressure. From the pure nickel perspective, nickel prices are expected to continue fluctuating within a range, supported by costs and influenced by macroeconomic factors. Next week, the average discount of high-nickel pig iron to electrolytic nickel is expected to slightly expand.
On the cost side, according to the calculation of high-nickel pig iron cash costs based on nickel ore prices from 25 days ago, the smelters' situation of negative margins remains ongoing. From the raw material perspective, auxiliary material prices slightly weakened this week, the output of molten iron remained at high levels, but high levels of coke inventory at steel mills exerted pressure on coke procurement prices, causing coke prices to fall, and coking coal prices also declined correspondingly. The cost line for auxiliary materials at smelters weakened.
On the mining side, the end of the rainy season in the Philippines has increased nickel ore shipments, but the shortage of Indonesian nickel ore has supported Philippine nickel ore prices, maintaining stable operation. It is expected that next week, the losses at high-nickel pig iron smelters will continue, auxiliary material prices may continue to weaken in the context of cautious steel mill procurement, and nickel ore prices will likely continue stable operation.
