[NPI Daily Review] Supply Contraction Expectations Heat Up, NPI Price Center Shifts Upward

SMM May 27,

   May 27, the SMM high-grade NPI market sentiment index was 2.53, down 0.02 MoM, the high-grade NPI upstream sentiment index was 3.1, up 0.01 MoM, and the high-grade NPI downstream sentiment index was 1.97, down 0.03 MoM. Today, the overall quotation center of the high-grade NPI market moved up steadily, with spot quotations stabilizing on the stronger side and a warming atmosphere of holding prices firm. Supply-side contraction expectations continued to ferment, with expectations of reduced NPI spot supply going forward, forming bottom support for prices. In terms of pricing models, affected by external policy uncertainties, trading sentiment turned cautious, and buyers and sellers mostly transacted based on average prices combined with premiums. The demand side still posed significant constraints, as downstream stainless steel finished product prices lacked support, steel mills were cautious in procurement with limited purchase willingness, upstream suppliers quoted on the higher side, price transmission between upstream and downstream was not smooth, new transactions were generally few, and market transactions were difficult to conclude. Overall, the current NPI market presented a pattern where supply contraction expectations provided a floor while weak demand constrained upside, with bullish expectations supporting higher quotations, but sluggish end-use demand restricted transaction volume expansion. In the short term, the market is likely to maintain a fluctuating trend that holds up well within a range, characterized by firm quotations but mediocre transactions.