SMM

As of last Friday, the average price of 8-12% high-grade NPI was 970 yuan/mtu (ex-factory, including tax), down 46 yuan/mtu from November 17. NPI prices continued to decline at a fast pace. From a fundamental perspective, despite a significant alleviation in the premium situation for Indonesian nickel ore, calculations based on prices from 25 days ago indicated an intensified loss for domestic high-grade NPI companies and a narrowed profit margin for some overseas high-grade NPI companies. According to SMM research, it is expected that the reduction in NPI output in November will be relatively limited. In addition, sell-off by traders who are facing capital strains has led to the ample supply of NPI. In terms of demand, the continuous decline in spot prices of 300-series stainless steel suppressed downstream demand. While there is still demand for restocking in the terminal market, purchasing decisions are cautious amid the backdrop of ongoing price declines. Given the oversupply in nickel industry chain, the bearish market cycle, and sluggish stainless steel demand, a short-term rebound in NPI prices seems unlikely.