SMM China July NPI Production and August Forecast

In July 2024, China's NPI production was 29,900 mt in nickel content (+6.43% MoM) and 737,000 mt in physical content (+10.69% MoM). Among these, high-grade NPI production was approximately 219,000 mt in physical content and 22,200 mt in metal content (+8,400 mt in metal content); low-grade NPI production was approximately 518,000 mt in physical content and 7,700 mt in metal content (+9,700 mt in metal content). Despite Indonesian RKAB new approval quotas in July, the mining volume was limited by funding and rainfall, leading to a continued rise in the import of Philippine nickel ore, which in turn raised the price of Philippine nickel ore and increased the costs for domestic smelters. Additionally, the tight supply of Indonesian NPI resources pushed the strong performance of NPI in July, with prices fluctuating upwards, leading to the profit recovery of some smelters and enhanced production drive. From the perspective of integrated stainless steel mills, since purchasing high-grade NPI externally was more cost-effective for 300-series stainless steel mills, their high-grade NPI production slightly decreased in July. With 300-series stainless steel prices fluctuating downwards and raw material prices running strong, some stainless steel mills suffered losses and adjusted their output structure to increase 200-series stainless steel production. Consequently, the total low-grade NPI output of 200-series stainless steel production lines increased in July.

In August 2024, China's NPI production is expected to reach around 30,400 mt in metal content, up 1.58% MoM. According to an SMM survey, a smelter in East China will continue to ramp up production in August, while a smelter in North China will undergo partial line maintenance, with limited impact on production. Additionally, the increase in NPI production from integrated stainless steel mills in August is still expected to be concentrated in the 200-series stainless steel production lines. In summary, China's NPI production in August is expected to maintain a growth trend, but the growth rate will slow down.