What Factors behind Price Recovery in High-grade NPI Market? SMM Reports

SHANGHAI, Jul. 3 (SMM) – High-grade NPI price has been sluggish for nearly two months since mid May, 2017, trading below 800 yuan per mtu. The high-grade NPI market, however, staged significant comeback last week after a slight rally two weeks ago.

It was reported that Tsingshan Steel raised the procurement price for high-grade NPI up to 840 yuan per mtu (price to factory, including tax), with purchasing volume around 2,000 tonnes. Taigang Stainless Steel also lifted the purchase base price for July’s high-grade NPI up to 790 yuan per mtu (price to factory, including tax, by cash), and the price would be raised further for large-volume suppliers. 

China Nickel Ore Inventories Return to Growth, SMM Reports

What factors are behind the round of price gain in the high-grade NPI market? SMM attributes this to following factors. 

First, Tsingshan Group has made preparation for production at its 1 million-tonne #300 stainless steel project in Morowali, Indonesia, so NPI supplies from Tsingshan Group’s Indonesian project are estimated to fall gradually. Meanwhile, Fujian Dingxin Industry, after keep silent for a long time, returned to the market for high-grade NPI purchases in mid-late June, with buying volumes at about 10,000 tonnes. With Tsingshan Group’s stainless steel project in Indonesia coming online and releasing capacity gradually, NPI shipments by Tsingshan Group from Indonesia to China will fall by about 50,000-60,000 tonnes or 6,000-7,000 tonnes (Ni content) per month.  

Second, the run-up in stainless steel market, albeit declines last week, helped domestic stainless steel mills return to run in the black. Mills, which cut or suspended production, restarted operations, growing demand for raw materials. 

Premiums of Imported Ferronickel for Q3 Terms Contracts Fall, SMM Reports

Third, inventories of raw materials at some mills are low, growing their eagerness to make purchases. Taigang Stainless Steel was heard to hold low inventories, and is expected to increase purchases in July. 

Fourth, China’s output of medium and high-grade NPI is expected to increase in June, but to remain low. SMM predicts that the output will be approximately 23,000-24,000 tonnes in June, down by around 9 percent. 

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.