The price of high-grade NPI is expected to be generally stable with slight rise, and the discount against refined nickel may narrow

In July 2025, the average discount of high-grade NPI to refined nickel was 309.13 yuan per mtu, an increase of 28.59 yuan per mtu compared to the previous month. During the same period, the price spread between the two fluctuated within a range, but the magnitude of fluctuation increased, while the price of refined nickel exhibited a trend of being in the doldrums. From a macro perspective, with the introduction of China's "anti-rat race" competition policies, the market received positive signals, driving a rebound and correction in non-ferrous metal prices. Although the price of refined nickel also followed this trend and rebounded, its increase was relatively limited. From a fundamental perspective, domestic refined nickel production slightly increased in July. However, downstream demand was in the off-season, leading to significant overall fundamental pressure and constraining the space for price increases. For high-grade NPI, the favorable fundamentals of the stainless steel industry, coupled with support from macro policies, led to a rebound in both futures and spot market prices, which in turn drove up the transaction price of high-grade NPI, the raw material. On the supply side, due to the sustained high prices of nickel ore, smelters faced significant cost pressure. As a result, some domestic and Indonesian smelters reduced their production. Regarding downstream demand, with the improvement of the macro environment, stainless steel mill profits were restored. Although production changes were minimal, demand for high-grade NPI remained robust, thereby improving the supply and demand situation. After

entering August 2025, the "anti-rat race" competition policies continued to influence the market, potentially sparking a new round of supply-side reforms. This would be beneficial for the price recovery of non-ferrous metals, including nickel, providing support for nickel prices. From a cost perspective, the approval situation for Indonesia's RKAB nickel ore quotas is optimistic. Considering that pyrometallurgy is operating at a loss, it is expected that the nickel ore premium will decline. This may lead to a downward shift in the cost center of nickel, exerting negative pressure on nickel prices. A comprehensive analysis suggests that refined nickel prices are expected to continue fluctuating within a range in August. For high-grade NPI, although the growth rate of supply is limited, the downstream stainless steel production schedule shows a good growth momentum, which helps to narrow the oversupply situation of high-grade NPI. It is expected that prices will remain stable with a slight upward trend. In summary, it is expected that the average discount of high-grade NPI relative to refined nickel will narrow in August.