The production of stainless steel mills may decline amid weak expectations, NPI prices are under pressure [NPI Daily Review]

On July 1, the prices of SMM 8%-12% high-grade NPI averaged 966.5 yuan/mtu (ex-factory, tax included), down 2 yuan/mtu from the previous working day. Supply side, domestically, NPI prices fluctuated downward in June, and market expectations for the future gradually weakened. It is expected that domestic NPI production may decline in July. In Indonesia, current NPI prices have shown a significant drop. Although high-grade nickel matte prices declined, there was still a drive for production conversion from NPI to high-grade nickel matte. With the new production lines in Indonesia, Indonesian NPI production is expected to increase in July, but the growth will be limited. Demand side, recently, a steel mill in South China saw a new low in NPI transaction prices, causing the market focus to drop again. Entering the off-season for consumption, stainless steel mills may reduce production amid weak expectations. Therefore, they adopted a wait-and-see stance towards procurement. In summary, in the short term, NPI supply will remain stable, but prices will be under pressure due to weak demand.