[3.24 Morning Meeting Summary] Last week, Indonesia's Ministry of Energy and Mineral Resources signaled that the PNBP policy might be implemented before Eid al-Fitr. If the policy is implemented as scheduled, the sales costs for nickel ore mines would increase. Coupled with the continuous rise in NPI and MHP prices downstream, the current market situation indicates that mines have strong bargaining power. The cost increases brought about by this policy may largely be passed on to downstream enterprises, providing strong support for nickel ore prices.

[SMM Daily Review: Stainless Steel Market Sentiment Pulls Back, High-Grade NPI Market Inquiry Activity Declines] On March 21, the SMM 8-12% high-grade NPI average price was 1,020 yuan/mtu (ex-factory, tax included), up 1 yuan/mtu from the previous working day...

[3.21 Morning Meeting Summary] In Indonesia, recent abundant rainfall coupled with a still tight supply of nickel ore has led to low inventory levels at smelters. Despite the release of new capacity, production only maintained a slight increase. Demand side, stainless steel futures orders were relatively ideal, and as the price of stainless steel scrap followed the rise in finished product prices, the economic advantage of stainless steel scrap weakened. This shift prompted stainless steel mills to show warmer sentiment towards purchasing high-grade NPI, with market inquiries becoming more active. In the short term, the cost support for high-grade NPI strengthened, and with tightening supply and demand, prices remained relatively stable with a strong trend.

According to SMM statistics, China's total stainless steel exports in March 2024 were 458,900 tons, an increase of 42.62% month-on-month and 17.65% year-on-year...

Stainless steel: The spot market is weak. This round of price decline is due to the poor performance of market demand, and futures fall. The social inventory is high, so that some traders who ship goods in advance.

On February 6, the main contract of Shanghai nickel opened at 124,860 yuan/ton and closed at 124,960 yuan/ton, up by 100 yuan/ton from the previous trading day's closing price. Intraday trading was weaker compared to the previous trading day, with an increase of 70,399 lots in trading volume and a decrease of 3,598 lots in open interest. This combination indicates a strong wait-and-see atmosphere for both long and short positions, with both sides reducing trading activity. The decrease in open interest coupled with the price increase indicates that the short positions in the futures market are surrendering and starting to actively cover shorts (i.e., buying to hedge), pushing prices higher. Although the short positions are actively covering, they are relatively rational and not urgent, seeking ideal prices. Therefore, prices are expected to rise slowly, and there is a high probability of sustained upward movement.