[NPI Daily Review] NPI market sentiment warms up, prices stop falling and stabilize; upward momentum still awaits demand verification

SMM, October 22:

       On October 22, the SMM high-grade NPI market sentiment factor stood at 1.73, flat MoM. The upstream sentiment factor for high-grade NPI was 1.74, up 0.01 MoM, while the downstream sentiment factor was 1.71, down 0.01 MoM. Sentiment in the nickel pig iron market recovered somewhat amid production cut rumors, with the overall trend showing signs of stopping falling and stabilizing. Expectations for a futures price hike were relatively strong, but there is a time lag in spot transmission, and no trend-based recovery has yet emerged. Sellers raised offers on improved sentiment, but steel mill profits imposed strong constraints, and willingness to accept higher offers was weak, with significant resistance to transactions at elevated prices. Some traders showed greater inquiry activity than before, but steel mills remained cautious in procurement, with low purchase floor prices, leaving a notable gap between buyers' and sellers' expectations. The market sees potential room for destocking once production cuts are implemented, but the mainstream view holds that production cuts will have limited impact on supply. Whether the rally can be sustained ultimately depends on downstream stainless steel consumption and actual procurement release from steel mills. The current market movement is driven more by sentiment, with insufficient substantive bullish support, and the short-term tug-of-war is expected to persist.