Last week (August 4-8), multiple deals were concluded in the nickel pig iron (NPI) market, driving offers higher. High-grade NPI mainstream offers were concentrated at Yuan 930-940/mtu (including delivery and VAT). According to Mysteel, China's ex-works price for high-grade NPI rose to Yuan 910-925/mtu; the domestic delivered price rose to Yuan 910-930/mtu; Indonesia's high-grade NPI prices (including delivery and VAT) rose to Yuan 910-925/mtu, while Indonesia's FOB price held steady at $110/mtu.
On the cost side, the mainstream transaction prices of 1.3% nickel ore from the Philippines were mostly concluded at around $42/wmt CIF, while 1.4% ore transactions were mostly near $50/wmt CIF. Downstream Chinese NPI smelters mostly reduced operating rates, maintaining a cautious stance on raw material procurement. In Indonesia, improved weather conditions boosted mining efficiency. The nickel ore premium remained within $24-25/wmt in the short term, which provided strong support for the NPI price.
On the supply side, facing prolonged losses, Chinese high-grade nickel pig iron (NPI) smelters widely reduced operating rates. China's actual NPI production reached 22,900 tonnes in nickel content in July 2025, marking a decrease of 1.69% month-on-month (MoM) and a decrease of 10.63% year-on-year (YoY). Production of medium-to-high grade NPI stood at 16,300 tonnes, down 2.32% MoM and 16.17% YoY.
As NPI prices touched bottom before rebounding, some previously reduced production lines in Indonesia saw minor production increases. According to Mysteel's survey covering 55 Indonesian NPI smelting projects, involving a total of 261 operational BF/EF/RKEF lines, no new production lines were added within the month. Indonesia's actual NPI production was 156,000 tonnes in nickel content in July 2025, rising 2.97% MoM and 18.14% YoY. Indonesia's NPI production for January-July 2025 reached 1,058,800 tonnes, representing a 24.62% YoY increase.
On the demand side, stainless steel futures fluctuated within a range last week, while spot prices edged up and social inventories gradually declined. Although stainless steel profitability improved, market players largely maintained a wait-and-see stance on raw material procurement and opted to buy based on demand. According to Mysteel, China's crude stainless steel production (300 series) from 43 domestic mills in July 2025 reached 1,698,100 tonnes, decreasing by 45,900 tonnes (down 2.63%) MoM but increasing 3.8% YoY. Scheduled production for the 300 series in August was 1,698,300 tonnes, up 0.01% MoM and 0.73% YoY. From a supply-demand perspective, the pressure from the NPI surplus remained substantial.
In the short term, NPI prices bottomed out supported by costs. Coupled with recovering profit margins in the industry, this drove a slight rebound in NPI prices. However, the pressure from the NPI surplus persisted. Market participants were advised to monitor subsequent developments in the stainless steel market, nickel ore supply from Indonesia, and the latest transaction dynamics in the NPI market.