A mainstream steel mill in South China recently entered the market with an inquiry price of Yuan 955/mtu (including delivery and VAT), an increase of Yuan 15/mtu from its previous inquiry. The overall NPI negotiation range subsequently shifted upward to Yuan 955-960/mtu (including delivery and VAT), with prices operating firmly.
According to Mysteel, during the week of September 8-12, the average price for high-grade NPI in China rose to Yuan 950-955/mtu (ex-factory); the delivered price increased to Yuan 955-960/mtu. For Indonesia, the high-grade NPI price (including delivery and VAT) climbed to Yuan 950-960/mtu; and Indonesia's FOB price advanced to $116/mtu.
Since the beginning of September, offers from NPI suppliers have been firm, and some traders have entered the market to restock, continuously pushing transaction prices higher. On September 9, a new tender price from a mainstream steel mill in South China was set at Yuan 955/mtu (including delivery and VAT), up Yuan 15/mtu from the previous tender, which significantly boosted market sentiment. The mainstream transaction price subsequently rose to Yuan 955-960/mtu (including delivery and VAT), while supplier offers were also lifted to Yuan 960-970/mtu (including delivery and VAT).
Stainless steel futures traded within a narrow range recently, leading mills to maintain a cautious stance on raw material procurement. The recent significant increase in NPI offers and transaction prices, which exceeded the mills' psychological expectations, has dampened their purchasing enthusiasm. No concentrated procurement or large-scale restocking activities were observed.
While Philippine mine offers remained firm, limited profit recovery at Chinese NPI smelters kept their nickel ore purchases cautious. The current CIF price for nickel ore with 1.3% Ni content declined to $42/wmt. During the week, the highest spot cost for RKEF NPI smelters reached 1,036 yuan/mtu, with the lowest profit margin falling to -8.11%. In Indonesia, nickel ore offers held firm. The September nickel ore premium remained at $24/wmt, with the CIF price for ore graded at 1.6% Ni and 35% Mg holding steady at $50.34/wmt, providing solid support for the bottom range of NPI prices. The current highest spot cash cost for Indonesian NPI reached 855 yuan/mtu, with the lowest profit margin at 8.4%.
Persistent production losses led to further production reductions at Chinese high-grade NPI smelters. Current production is concentrated in Fujian, Guangdong, Guangxi, Jiangsu, Shandong, and Hebei, with most plants maintaining reduced operating rates. China's actual NPI production in August 2025 reached 22,900 tonnes in Ni. content, down 0.19% month-on-month and 9.96% year-on-year. Medium and high-grade NPI production was 16,400 tonnes in Ni. content, up 1.06% month-on-month but down 12.22% year-on-year. With slightly recovered profits, some Indonesian NPI plants saw modest production increases. According to Mysteel, Indonesia's actual NPI production in August was 154,700 tonnes in Ni. content, flat month-on-month but up 27.22% year-on-year.
The oversupply pressure in the nickel pig iron (NPI) market persists. On the demand side, Mysteel shows that China's 300-series crude steel production from 43 domestic stainless steel mills reached 1.7379 million tonnes in August, a month-on-month increase of 39,800 tonnes (up 2.34%) and a year-on-year increase of 3.08%. The scheduled production for September is projected at 1.8028 million tonnes for the 300-series, up 3.73% month-on-month and 7.48% year-on-year. Regarding inventory, social stocks of stainless steel showed significant drawdowns. As of September 12, the total 300-series stainless steel inventory stood at 623,700 tonnes, down 2.68% week-on-week, indicating manageable overall inventory pressure. Although the increase in both supply and demand has somewhat eased the NPI oversupply pressure, the overall surplus remains, posing significant resistance to further price increases for NPI.
In the short term, market demand for NPI remains relatively strong. Coupled with firm supplier offers and rising inquiry prices from major steel mills, NPI prices are more inclined to rise than fall. However, considering the lackluster momentum in spot stainless steel prices and ongoing poor profitability, the upside potential for NPI prices is likely limited. From a long-term perspective, recent developments in Indonesia have introduced greater volatility. Factors such as the local government's plans to crack down on illegal mining and policy uncertainties like the shortening of the RKAB approval cycle from three years to one year are unsettling market sentiment, increasing mid-to-long-term uncertainties.
Market participants are advised to closely monitor demand for stainless steel, changes in Indonesian nickel ore policies, and the psychological tendencies of both buyers and sellers.
Written by Cora Ji, jiruyan@mysteel.com
