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Chinese NPI prices resume downtrend amid weak demand and oversupply

The downtrend in China’s nickel pig iron (NPI) prices resumed in the week to Friday December 8 after pausing the preceding week, with the market still facing oversupply and slow demand from the stainless steel sector, sources told Fastmarkets

December 11, 2023
By Dylan Duan
Base metals Nickel Stainless steel

Fastmarkets’ weekly price assessments for nickel pig iron, high-grade, NPI content 10-15%, spot, ddp China and nickel pig iron, high-grade NPI content 10-15%, contract, ddp China were both 910-930 yuan ($127-130) per nickel unit on December 8, down by 30 yuan per nickel unit from 940-960 yuan per nickel unit on December 1.

Liquidity captured was at 910-930 yuan per nickel unit during the past week.

Demand from the stainless steel sector remained relatively weak, while no production cuts were seen at major NPI producer Indonesia, where smelters maintained high output, according to market participants.

“Though NPI prices have tumbled so much, Indonesian smelters still managed to maintain a very high output,” a NPI trader based in eastern China said. “This is because nickel ore prices in Indonesia have been dropping.”

Indonesian nickel ores had been trading at elevated prices amid concerns of a supply shortage after the Indonesian government said it would not issue any nickel ore mining quotas for 2023, which also pushed up NPI prices. Ore prices in the country then fell when NPI prices tumbled again in mid-September, sources said.

“Nickel ore prices have dropped by $15 per tonne in Indonesia [from their peak],” a producer source said.

Meanwhile, nickel ore prices were stable to lower in China’s import market amid weak demand from NPI makers.

An offer for 1.5% nickel ore was heard at $45 per tonne, indicating the downtrend.

Fastmarkets’ weekly price assessment for laterite ore with 1.5% Ni content, cif China was $44-46 per tonne on December 8, down by $4 per tonne compared with $48-50 per tonne on December 1.

And Fastmarkets’ weekly price assessment for nickel ore 1.8% basis 15-20% Fe water content: 30-35% Si:Mg ratio<2, lot size 50,000 tonnes, cif China was $78-80 per tonne on December 8, unchanged week on week.

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