Nickel Pig Iron prices have declined significantly as China enters September, with SMM's assessment for 8–12% NPI, ex-works, dropping to CNY 1,100.5/mtu on 7 September, down 4 from the previous Friday and 13.5 from the end of August, according to Shanghai Metals Market analysis. Despite the lower price levels that the market had repeatedly discussed as a potential support point, Chinese stainless steel mills have shown reluctance to return to aggressive purchasing. One major stainless mill lowered its buying indication to CNY 1,090/mtu while reporting ample inventories and no immediate plans for large-volume purchases.
A trader reported that its offer at CNY 1,100/mtu still attracted no buying from mills, indicating that procurement weakness visible in mid-August has carried into September. The core issue remains inventory positions. Mills that require material are buying at lower prices, while those with sufficient stocks continue to wait.
Individual transactions are setting fresh price references without triggering a broad restocking cycle. One mill purchased approximately 10 kt of NPI containing around 11% nickel last week at CNY 1,095/mtu ex-hold, while another trader reported roughly 10 kt of sales over the week, with delivered prices for 11.5–13% material declining from CNY 1,120/mtu early in the week to 1,110–1,115. However, lower prices have generated isolated business rather than widespread procurement acceleration.
Port availability has also increased, with SMM's high-grade NPI port inventory rising from 22.1 kt of nickel on 13 August to 35.3 kt on 3 September, an increase of approximately 60%. This expanded buffer has weakened support from earlier spot tightness and given mills additional room to choose and wait. Finished stainless inventories provide little encouragement for aggressive raw-material buying.
China produced 1.97 Mt of 300-series stainless in August, with September's production forecast standing at 1.907 Mt, down 63 kt or about 3.2% month on month. Producer inventories increased from 948.4 kt in July to 1,003.7 kt in August. Premiums have also been squeezed.
On 19 August, some mills lowered their buying indications from a premium of CNY 15/mtu to plus 5 or flat. By 27 August, material around 10% nickel traded close to SMM's average assessment, with much material below 11% also trading near flat. Higher-grade material retained some support, with a supplier offering 11% material at a premium of CNY 10/mtu on 3 September, but the broader premium structure has weakened.
Indonesian producers are experiencing margin compression despite relief from lower ore prices. SMM's Indonesia NPI FOB index fell to USD 142.7/mtu on 7 September, down 0.7 from the previous Friday. The assessment for Indonesian 10–12% NPI landed in China, inclusive of tax, declined by CNY 4/mtu to 1,110.
At the start of September, the assessment for Indonesian domestic 1.6% nickel ore delivered to smelters fell from USD 65.8/wmt at the end of August to 64.1, a decline of approximately 2.6%. Against USD 79.3/wmt in late May, the cumulative fall was close to 20%. However, SMM's IWIP spot-ore full-cost margin for Indonesian producers stood at 6.99% on 7 September, down 2.89 percentage points from 9.88% on 4 August.
Indonesian NPI production has shown expansion despite margin pressures. Production rose from 127.5 kt of nickel in June to 135.1 kt in August, an increase of approximately 6%. Narrower margins would need to translate into actual production cuts or lower shipments to provide stronger price support.
The analysis emphasizes that inventory absorption remains central to the market in September's second week. Lower spot prices can prompt individual purchases without shortening the waiting time of well-stocked mills. For sellers seeking stability around 1,100, the critical test is whether buyers continue purchasing after initial lower-priced transactions.
Otherwise, 1,100 may simply become the starting point for another round of price concessions. Bruce Chew, Nickel & Stainless Steel Analyst at Shanghai Metals Market, noted that sustained buying or supply cuts are needed to establish firmer price support.
Source: news.metal.com