[SMM Stainless Steel Market Flash] Indonesian Stainless Trade Dispute Could Shape Future EU Enforcement

LME nickel futures closed at USD18,913/ton on May 22, gaining 2.3% on the week and snapping a two-week losing streak, supported by a stabilizing US dollar and Trump's persistent calls for Fed rate cuts. LME inventories dipped 600 tons to 279,072 tons, with May's average price of USD18,815 remaining above April levels. Near-term outlook stays uncertain, however, as record-low US consumer confidence and weak Chinese stainless steel demand during the late-May rainy season create headwinds. Market participants expect subdued and volatile trading ahead, though tight nickel ore supplies should provide a price floor.

Indonesian authorities suspended over 50 mining firms during work plan inspections, while power issues are forcing Weda Bay industrial park to cut NPI output in June, keeping raw material costs elevated and global nickel prices high. As a result, Chinese Taiwan's upstream stainless steel mills are expected to announce flat-to-higher prices for June, following five consecutive months of increases. While semiconductor expansion and green energy infrastructure support local demand, sustained price hikes risk triggering buyer resistance among exporters. Market participants anticipate mills will balance high production costs against domestic market tolerance, pointing to a steady-to-slightly-higher pricing outcome.

[SMM Daily Comment: Bullish and Bearish Factors Intertwined, NPI Market Continued to Move Sideways] May 26, the SMM upstream sentiment index for high-grade NPI was 3.09, down 0.03 MoM, while the downstream sentiment index for high-grade NPI was 2, flat MoM.