SMM June 3,
June 3, the SMM high-grade NPI market sentiment index was 2.49, up 0.01 MoM, the high-grade NPI upstream sentiment index was 3.04, up 0.02 MoM, and the high-grade NPI downstream sentiment index was 1.94, up 0.01 MoM. Today, the NPI market continued itsstructural divergence and stagnantpattern. Futures moved steadily with no significant fluctuations, and the tug-of-war between longs and shorts remained relatively balanced. Supply side, notable structural tightness was evident, with mid-to-high grade resources above 11% seeing tight circulation and high market recognition. High-grade resources above 12% were even scarcer, with strong premium performance. The tiered premium trend continued to intensify, and the overall price center edged up slightly. Demand side, performance remained weak. Steel mills showed insufficient willingness to purchase, with a notable price spread between buyers and sellers' elevated asking prices. Spot fixed-price transactions were stagnant, with most deals completed based on average prices. Meanwhile, steel scrap's substitution advantage became more prominent, offering better economics than NPI, further suppressing just-in-time procurement of NPI. Overall, the structural tightness of high-grade resources provided structural support for prices, but bearish factors such as weak demand, raw material substitution pressure, and bid-ask price spread divergence continued to weigh on the market. In the short term, the NPI market was likely to maintain a pattern of structurally firm high-grade prices, sluggish overall transactions, and sideways movement.
