Nickel and stainless steel prices continued to decline, leaving NPI prices under pressure [NPI Daily Review]

On June 6, SMM 8-12% high-grade NPI prices averaged 993.5 yuan/mtu (ex-factory, tax included), down 0.5 yuan/mtu from the previous working day. Supply side, the market pays close attention to the progress of Indonesian RKAB approval in June. However, there has been no increase in the new approval quotas, and the current mining quotas for Indonesian nickel ore remain under pressure. The shipments of Philippine nickel ores to Indonesia have partially alleviated the shortage of nickel ores for NPI smelters, but the production ramp-up was limited. Domestically, the costs for NPI smelters stayed high, imposing constraints on overall production enthusiasm. Therefore, the current proportion of domestic NPI in the total circulating supply is relatively low. Demand side, steel mills adopted a wait-and-see attitude towards raw material purchases amid fluctuating prices of stainless steel and refined nickel. Additionally, the sales pressure made it difficult to reduce stainless steel inventory, resulting in sluggish NPI demand and further declines in NPI purchasing prices. In summary, despite limited NPI circulating supply, NPI prices are expected to face pressure as both upstream and downstream quoted lower with the downward shift in nickel prices and the off-season for stainless steel consumption.