NPI Prices still Vulnerable to Decline unless End Market Recover

SHANGHAI, May  31 (SMM) - Recently, the price of NPI has entered a downward channel, and the price difference between NPI and pure nickel still maintained a high level. The weak demand in stainless steel downstream markets and plentiful supply of NPI have caused the price of NPI to fall. For steel mills, the decline in NPI prices will make them more willing to purchase. However, as NPI price is in the downward channel, steel mills will prefer to purchase just in need rather than on a large scale. In addition,the profitability of steel mills also affect their willingness to purchase. At present, according to SMM survey, the full cost of non-integrated cold-rolling stainless steel plant is about 19,100 yuan/mt, and the prices of cold-rolled coil and hot-rolled coil are about 19,100-19,200 yuan/mt. The profit margin of stainless steel has not improved, keeping them cautious about purchasing. NPI prices will not stabilise until end markets recover. As the decline in NPI and ferrochrome prices has weakened cost support, stainless steel prices may remain weak, which in turn will continue to weigh on NPI prices.