Recently, SHFE nickel and stainless steel futures prices rose, fostering a warmer trading atmosphere and stronger bullish sentiment in the market. Downstream stainless steel spot prices improved in tandem. This, combined with market rumors that Indonesia's 2026 RKAB quota might be cut to 250 million tonnes--approximately 34% lower than the approved 379 million tonnes for 2025--jointly drove nickel pig iron (NPI) prices higher. The current NPI price continues to climb, with the latest concluded price reaching Yuan 930/mtu (including delivery and VAT).
Source: Mysteel
For nickel ore, the supply declined while prices remained firm. The Surigao mining area and surrounding regions in the Philippines have entered the rainy season, resulting in a reduction in the overall supply of nickel ore. Meanwhile, n are the main force of shipment, and most of the shipments from the northern mines are made through tenders. This bidding environment has generally resulted in higher prices. For instance, a tender for 1.3% nickel ore from Benguet Mining was concluded at $33.5/wmt FOB, and a tender for 1.4% ore from Eramen Mining was finalized at $40/wmt FOB. Nickel ore prices remained relatively firm.
In Indonesia, both the Sulawesi and Maluku Utara mining regions have entered the rainy season, leading to a decrease in nickel ore supply. Although Indonesia's December (Period II) domestic nickel ore benchmark price fell by $0.11-0.18/wmt, the premium was maintained at $25/wmt, keeping the overall price at an elevated level.
Additionally, stainless steel futures prices continued to climb, buoyed by supportive macro news, with the main contract reclaiming ground above the Yuan 13,000/tonne level. Spot market prices across all grades broadly followed this upward trend. Regarding inventory, social stocks of 300-series stainless steel have declined for several consecutive weeks, indicating a clear destocking trend. The production of 300-series stainless steel crude steel for December was 1.7472 million tonnes, reflecting a slight month-on-month decrease of 0.82%. Overall production cuts by steel mills remained limited, and the demand for raw material nickel pig iron (NPI) still existed. With the rise in stainless steel spot prices, the profits of steel mills recovered slightly. Coupled with the regular inventory replenishment demand at the end of the year, their mentality of lowering the price of NPI is expected to ease.
Recent news regarding Indonesia's adjustments to next year's nickel ore quotas and its domestic ore benchmark price formula spurred a rise in Shanghai nickel futures. SHFE nickel prices climbed steadily from Yuan 111,890/tonne to a peak of Yuan 130,880/tonne. Against the backdrop of tightening ore supply expectations, support for the bottom line of nickel pig iron (NPI) prices strengthened, with transaction prices rebounding to Yuan 920/mtu (including delivery and VAT). Influenced by the rise in NPI prices, profit losses for Indonesian NPI plants narrowed slightly. The current spot cash cost for Indonesian NPI production now ranges up to a high of Yuan 873/mtu, with the lowest profit margin reported at -0.64%.
Written by Cora Ji, jiruyan@mysteel.com
