Although NPI (Nickel Pig Iron) prices edged up recently, the upward potential was constrained by downstream stainless steel mills' acceptance levels and persistent oversupply pressure. Currently, spot offers for high-grade NPI are concentrated at Yuan 940-950/mtu (including delivery and VAT). However, steel mills' target purchase prices are mainly around Yuan 930-935/mtu, indicating a gap in price expectations between suppliers and buyers.
According to Mysteel, China's ex-works price for high-grade NPI was temporarily stable at Yuan 925-930/wmt. The domestic delivered price was also temporarily stable at Yuan 930-935/mtu. For Indonesia, the high-grade NPI price (including delivery and VAT) was temporarily steady at Yuan 920-940/mtu, while Indonesia's FOB price was held stable at $111/mtu.
In mid-July, China's mainstream steel mills continued to exert pressure on raw material costs, pushing the concluded price of NPI below the year's previous low. The nickel pig iron price fell to Yuan 910/mtu (including delivery and VAT). However, by the start of last week (August 18-22), the latest NPI transaction was concluded at Yuan 960/wmt (ex-work, including VAT). But as market sentiment cooled, reflected by a decline in stainless steel futures--where the main contract fell significantly--inquiries for NPI also diminished.
On the supply side, most Chinese NPI smelters are currently producing based on long-term contract orders. Indonesian smelters have already sold out their August order volumes. On the demand side, steel mills procured based on immediate needs. While some mills concluded small spot orders recently, procurement remained predominantly focused on long-term contracts.
According to Mysteel survey, the production of 300-series stainless steel in China continued to decline in July. The crude steel production of the 300-series from 43 Chinese stainless steel mills reached 1.6981 million tonnes, down 2.63% month-on-month. Based on statistics from General Administration of Customs of the People's Republic of China (GACC), China's NPI imports in July 2025 stood at 836,000 tonnes, a decrease of 206,000 tonnes month-on-month. Notably, imports from Indonesia accounted for 814,000 tonnes, down 204,000 tonnes from the previous month. Despite this significant drop in NPI imports for July, a surplus in the Chinese market persisted.
Meanwhile, Mysteel survey indicated that the actual metal production of NPI in Indonesia was 154,700 tonnes in July, up 2.11% month-on-month and 26.08% year-on-year. Total Indonesian NPI production from January to July 2025 reached 1.0575 million tonnes, a 24.47% increase compared to the same period last year. The production increase in July was primarily attributed to the restart of some previously reduced production lines and the conversion of some matte production lines to NPI. With Indonesian NPI production operating at high levels and limited growth in Chinese stainless steel production, significant upward resistance for NPI prices remains due to oversupply pressures.
On the cost side, improved weather conditions in Indonesia enhanced mining efficiency, alleviating some tightness in nickel ore supply. However, replenishing high-grade nickel ore supplies in Indonesia still requires time. The nickel ore premium for August held steady at $24-25/wmt. Specifically, the CIF price for ore with Ni:1.6% and MC:35% remained at $50.54/wmt. Currently, the highest spot cash cost for Indonesian NPI reached Yuan 856/mtu, with a minimum profit margin of 5.2%, indicating solid support for the bottom range of NPI prices.
Earlier, driven by a recovery in the industry chain profits, NPI offers were raised. However, as mainstream steel mills had not yet publicly initiated tender inquiries for NPI, the subsequent price decline was limited. Recently, the stainless steel market weakened, with spot transactions softening and social inventory destocking progressing slowly. Steel mills maintained a cautious stance on raw material procurement, with target purchase prices for NPI mostly around Yuan 930-935/mtu (including delivery and VAT).
NPI prices are expected to remain stable in the short term. On the one hand, high production costs coupled with a slight recovery in industry chain profits have strengthened smelters' price support sentiment. On the other hand, production from some reduced Indonesian NPI smelters is gradually recovering, while new production lines are still coming online. Concurrently, weak stainless steel demand means that despite some increase, mill scheduling remains relatively low. Under oversupply pressure, the upside for NPI is limited, weighing on market confidence. Caught between cost support and surplus pressure, NPI prices are anticipated to trade steadily in the near term.