Nickel Ore & NPI Price Review and Forecast

Nickel Ore

Last week, the average price of Ni 1.5% ore was $46/wmt on a CIF basis, unchanged WoW. The rainy season is nearly over, leading to increased stocks at ports last week. Nickel ore transactions in the Philippines will resume this week. In Indonesia, prices for 1.2% laterite nickel ore were at $21.3- $25.3/wmt. Similarly, prices for 1.6% laterite nickel ore were at $37.3-$42.3/wmt. Nickel ore prices stayed high following a big rise. Despite releasing 152 million wmt quotas, they haven't fully hit the market yet.

NPI

As of last Friday, the average price of 8-12% high-grade NPI was 934.7 yuan/mtu (ex-factory, including tax), down 12.7 yuan/mtu WoW. Supply side, even though the approved nickel ore quota is increasing, it still takes time for the nickel ore to move from mines to smelters. As a result, NPI production is expected to stay low in March. Stainless steel demand was weak, which isn't boosting the high-grade NPI prices. Weak stainless steel demand means inventory accumulation and lower NPI prices.

The cost efficiency of high-grade NPI widened last week

Currently, the cost of producing stainless steel from stainless steel scrap is around 13,772.37 yuan/mt, down 230 yuan/mt WoW, while producing it from high-grade NPI costs about 13,620.08 yuan/mt, down 110 yuan/mt WoW. The drop in stainless steel prices made steel mills less eager to buy raw materials, lowering prices for stainless steel scrap and high-grade NPI. As stainless steel prices stabilize, stainless steel scrap prices slightly rose. In Foshan, where stainless steel scrap is scarce, steel mills gave a 50 yuan/mt discount on purchases on March 28. Despite this, the market remains stable. Eased nickel ore shortages, along with falling stainless steel and nickel prices caused a drop in high-grade NPI prices to920 yuan/mtu, setting a bearish tone for April. In summary, the stainless steel market is bearish, with raw material prices hard to sustain. Limited stainless steel scrap price drops are expected due to slightly tight supply, while high-grade NPI prices may inch lower amid persistent supply surplus. High-grade NPI will likely maintain and expand its cost efficiency.

Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.