SMM Analysis On China October NPI Production And November Forecast

In October 2024, the national NPI production increased by approximately 8.11% MoM in physical content and by approximately 4.16% MoM in metal content. Both physical content and metal content of national NPI rose in October. The spot prices of domestic high-grade NPI fluctuated upward, enhancing the production enthusiasm of smelters, leading to higher output. Additionally, the demand for high-grade NPI from domestic steel mills increased, prompting domestic high-grade NPI smelters to improve the grade to meet market demand, which in turn drove the metal content up MoM. Furthermore, from the perspective of integrated stainless steel mills, although the economic advantage of self-produced high-grade NPI has somewhat recovered, steel mills still primarily purchase externally in the short term, resulting in a slight decline in self-produced high-grade NPI. Moreover, the increased production of 200-series stainless steel mills led to a rise in low-grade NPI production, reflecting an overall expansion in physical content MoM in October.

In November 2024, the national NPI production is expected to increase by approximately 2% MoM in physical content and by approximately 1.25% MoM in metal content. According to the SMM survey, the resumption of production after maintenance at smelters in North China will bring an increase in the supply of high-grade NPI. Meanwhile, the production of 200-series stainless steel is expected to continue increasing, with a corresponding slight rise in low-grade NPI production. However, the decline in high-grade NPI prices in November is expected to weaken the production drive of smelters, resulting in a limited overall increase in production for November.