The SMM average price for 10-12% high-grade NPI fell WoW by 2.2 yuan/nickel unit to 1,127.2 yuan/nickel unit (ex-factory, tax included), while the Indonesia NPI FOB index price average fell WoW by $0.42/nickel unit to $145.34/nickel unit. This week, the spot high-grade NPI market remained in a deep supply-demand stalemate. The psychological price levels of upstream and downstream have long shown a clear gap, and overall spot transactions stayed sluggish, with only a small number of scattered deals concluded and very scarce fixed-price bulk trades.
Demand side, constrained by the traditional off-season for stainless steel, steel mills strongly pushed for lower prices, and most buyers maintained low purchasing targets. Coupled with generally bearish market expectations for August, some steel mills, with ample raw material inventory from earlier, had weak initiative to purchase. While inquiries occasionally increased, actual purchases were cautious. Meanwhile, inquiries and negotiations for September forward cargoes continued to heat up, and forward stockpiling gradually began, but most remained at the discussion stage or on an average-price quotation basis, without large-scale orders finalized. On the supply side, major suppliers held price-firming intentions, with a psychological floor for fixed-price offers and insufficient motivation to actively offer significant discounts. Some traders showed strong wait-and-see sentiment or were bullish on the outlook, choosing to hold back from selling in the short term and suspending offers to the market.
Overall, weak end-use demand in the off-season and bearish sentiment toward next month’s market continued to weigh on prices. Meanwhile, tight spot circulation and some sellers’ reluctance to sell limited deeper price declines. Bullish and bearish forces balanced each other, making it persistently difficult to match spot transactions. Trading focus gradually shifted to forward contracts. NPI prices are expected to remain in a sideways, stalemate pattern in the short term.
From the perspective of NPI conversion to high-grade nickel matte, the discount of high-grade NPI to refined nickel widened further this week. The widening spread mainly resulted from divergent price trends on both sides: refined nickel prices rose somewhat, while high-grade NPI continued to be pressured by the traditional stainless steel off-season, with spot prices lacking upward momentum. The average discount of high-grade NPI to refined nickel slightly widened to 181.4 yuan/nickel unit. Although the discount has expanded, the current spread level has not yet reached the threshold. Currently, the profitability of direct export sales of high-grade NPI remains better than converting to high-grade nickel matte. The conversion cannot cover extra processing costs and production losses, and does not yet provide the economic conditions to drive large-scale switching of smelting lines to high-grade nickel matte. In the short term, conversion of high-grade NPI is unlikely to occur.
This week, China’s smelting costs for raw materials such as nickel ore and coal were kept broadly stable, and smelting costs were basically flat. Coupled with limited fluctuations in the spot price of high-grade NPI, production profits at domestic NPI plants remained relatively stable. In Indonesia, the raw material supply saw significant improvement, and a pullback in local nickel ore prices drove down smelting costs. With selling prices of finished products showing limited change, profit margins for Indonesian smelters have been repaired.
Looking ahead, the short-term market lacks direction from concentrated transactions, making it difficult to quickly narrow the price gap between upstream and downstream. High-grade NPI is expected to move sideways within a range. Increasing arrivals on the supply side have eased the pressure from tight supply. Against the backdrop of the off-season, demand is unlikely to recover notably, and cost support is marginally weakening. It remains necessary to continue monitoring the port arrival pace, steel mills' procurement pace, and price changes in other furnace charges.
![[SMM Analysis] Downstream Purchase Willingness Weak; Intermediate Product Payables in the Doldrums This Week](https://imgqn.smm.cn/usercenter/NHXhQ20251217171733.jpg)
