NPI upstream and downstream were in a stalemate [NPI Daily Review]

On June 4, SMM 8-12% high-grade NPI averaged 998.5 yuan/mtu (ex-factory, tax included), down 0.5 yuan/mtu from the previous working day. Supply side, the market closely watches the progress of Indonesian RKAB approval in June, but there has been no increase in the new approval quotas. The current mining quota for Indonesian nickel ore remains under pressure, leading to tight raw material supply for NPI smelters in the short term. Despite an upward trend in NPI prices, production ramp-up was weak. Therefore, June NPI production will barely increase significantly. Domestically, the losses among NPI smelters persisted as auxiliary materials and nickel ore prices may run stable in the short term with no downward trend anticipated. In addition, most domestic NPI have been booked by long-term agreements with traders and steel mills. As a result, NPI circulating supply tightened. Demand side, high stainless steel social inventories and weak end-user consumption made it difficult to reduce stainless steel inventories. Anti-dumping measures on domestic stainless steel by overseas markets may impact exports, leading to a potential downward in scheduled production of steel mills and a possible weakening of NPI demand. In summary, as downstream steel mills adopt a wait-and-see approach, NPI prices are expected to hold stable in the short term.