NPI prices inched lower
As of last Friday, the average price of 8-12% high-grade NPI was 954.8 yuan/mtu (ex-factory, including tax), down 3.2 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 the mine to the smelter. As a result, the current operating rate of NPI producers remains low. Stainless steel and stainless steel scrap prices kept dropping. High-grade NPI is still more cost efficient than stainless steel scrap. The terminal need for stainless steel stayed low, failing to boost the high-grade NPI prices. As a result, it causes a build-up in inventory and is expected to keep NPI prices low.
Weekly average discount of high-grade NPI stood at 443.8 yuan/mtu against refined nickel
Weekly average discount of high-grade NPI widened 45 yuan/mtu to 443.8 yuan/mtu against refined nickel last week. The price difference
grew because pure nickel prices went up, but NPI prices dropped. Also, better macro outlooks and the price rise in intermediate goods
used in pure nickel production have boosted pure nickel prices. Lately, the improved macro outlook and interest rate cut expectation made the market optimistic. But, NPI demand is still low, even though supply was cut. In the future, the slow demand for stainless steel hints the wider price difference between the two.
Losses of high-grade NPI plants widened last week
NPI plants suffered wider losses based on the prices of nickel ore purchased 25 days earlier. At the raw material end, the coking coal and coke prices slightly decreased but remain generally stable, thus having a minimal impact on the production cost of high-grade NPI. Some enterprises suffered wider losses due to the price increase of nickel ore purchased 25 days earlier. NPI prices dropped last week. This causes bigger losses.
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