This week, stainless steel spot prices remained stable, but production costs increased, further narrowing the profit margins of stainless steel mills. Taking 304 cold-rolled products as an example, based on the raw material prices of the day, the full cost profit margin fell to -0.58% this week; if calculated using the cost of raw material inventory, the margin reached 1.78%. On the cost side for nickel-based raw materials, SHFE nickel futures were driven higher mid-week by news of nickel mine approvals in Indonesia; high-grade NPI rose in tandem with the movement in SHFE nickel futures and expectations of tight nickel ore supply, which revived trading activity in the market as the Chinese New Year holiday approached—even though stainless steel mills had largely completed their procurement and stockpiling, traders held strong bullish sentiment. As of Friday this week, the price of high-grade NPI with 10-12% grade increased by 21.5 yuan per mtu, settling at 1,051.5 yuan/mtu. In the stainless steel scrap market, with the Chinese New Year holiday approaching, trading at scrapyards gradually halted as merchants closed for the holiday, leading to a complete suspension of market activity and stable prices. Although stainless steel scrap holds an economic advantage over high-grade NPI, this advantage has not yet translated into price movements; although SS futures strengthened on news related to Indonesian nickel mines, the impact on the stainless steel scrap market was limited. Trading in February is expected to remain stagnant, with the key focus after the holiday being the pace of demand recovery; the market overall maintains optimistic expectations. As of Friday this week, the price of 304 off-cuts in Shanghai remained steady, with the latest offer around 9,650 yuan/mt. On the cost side for chromium-based raw materials, high-carbon ferrochrome prices continued their stable trend this week. As the Chinese New Year holiday approached, most stainless steel mills had completed their stockpiling, and trading of high-carbon ferrochrome essentially stalled; given that current prices are already at high levels, they are expected to remain stable before the holiday. As of Friday this week, the price of high-carbon ferrochrome in Inner Mongolia held steady WoW, settling at 8,550 yuan/mt (50% metal content).

Indonesia's 2026 nickel production might potentially face a severe supply crunch as the government’s 270 million tonne RKAB quota ceiling falls significantly short of the 343 million tonnes required by surging downstream projects. With major mines like Weda Bay facing drastic 71% cuts and administrative bottlenecks paralyzing sales, the market remains in a high-tension deficit, pinning its hopes on a potential July quota revision to stabilize the industry.

[6.18 Morning Meeting Minutes] Recently, the premium for saprolite ore in Indonesia's nickel ore market remained high, and the cost line of nickel ore for smelters remained firm. Additionally, the drive to switch production to high-grade nickel matte was not met. Currently, the main product of RKEF capacity is still high-grade NPI, and overall production may increase MoM from last month. Demand side, the proportion of long-term agreements for raw materials among major stainless steel mills is relatively high, and there has been a considerable trading volume of spot orders on the eve of this month. Currently, the demand for external purchases is weak.

[6.17 Morning Meeting Minutes] LME nickel prices declined slightly this week. Demand side, despite signs of recovery in nickel salt demand MoM in June, the overall demand remained in a sluggish phase. Affected by the presence of some raw material inventory and weak order demand, the inquiry and transaction activity of precursor companies for nickel salt were low during the traditional procurement period this week.

[Morning Meeting Minutes on June 16] Last week, nickel ore prices in the Philippines remained stable. The CIF prices of Philippine laterite nickel ore (NI1.3%) from the Philippines to China were $44-45/wmt, and the FOB prices were $34-36/wmt. The CIF prices of laterite nickel ore (NI1.5%) were $59-60/wmt, and the FOB prices were $49-51/wmt. In terms of supply and demand, in terms of supply, although there was precipitation at major nickel ore loading points in the Philippines, the continuous rainfall during the week significantly impacted the loading progress of nickel mines, and the loading progress was generally delayed compared to expectations.

Philippine nickel ore prices remain high, forcing domestic enterprises to choose between purchasing at high prices or cutting production. Indonesian limonite ore prices strengthen again.