SMM Analysis On China September NPI Production And October Forecast

In September 2024, the national NPI production in physical content decreased by approximately 0.95% MoM, while the metal content increased by about 4.83% MoM. The decline in physical content and rise in metal content were mainly due to the decline in low-grade NPI production amid falling prices of 200-series stainless steel. With expanded losses, integrated 200-series stainless steel mills adjusted their production pace, reducing the output of 200-series stainless steel and consequently lowering low-grade NPI production. Additionally, in September, a smelter in east China resumed part of its production lines and ramped up production, while a smelter in north China saw an increase in production driven by downstream demand for high-grade NPI, boosting the overall national NPI metal content. Reviewing September, high-grade NPI prices fluctuated downward, but with support from downstream stainless steel demand and cost support, smelters' losses improved compared to before, driving a recovery in production. Overall, the metal content of high-grade NPI increased by 7.10% compared to August.

In October 2024, national NPI production in physical content is expected to rise by approximately 5.36% MoM, with metal content expected to increase by about 2.69% MoM. According to an SMM survey, a smelter in north China plans to overhaul a production line, leading to a decrease in output compared to September, while a smelter in east China continues to ramp up production on its restored line, supporting high-grade NPI production. Additionally, in October, stainless steel prices are expected to rebound due to favorable macro policies, with profits for 200-series stainless steel recovering, leading to higher production expectations. Integrated 200-series stainless steel plants are expected to increase low-grade NPI output, with physical content expected to rise by about 7.26% in October. In summary, domestic NPI production in October is expected to reach a yearly high.