- Rally in NPI tags outpaces rise in ore costs
- Indonesian smelters’ profits also up w-o-w
Mysteel: Over the past month, China’s prices of high-grade nickel pig iron (NPI) increased no fewer than nine times, pushed higher by firm support from the nickel ore market and strong demand from stainless steelmakers. These sustained gains finally returned domestic NPI smelters to profitability after four months of losses.
As of 18 March, Mysteel assessed prices of 7-13% grade NPI in East China’s Shandong province at RMB 1,020/metric tonne unit (mtu) ($140.9/mtu), including delivery and 13% VAT, marking a further RMB 25/mtu increase from a week earlier.
According to Mysteel’s assessment, a major NPI smelter in Shandong, affiliated with Taiyuan Iron & Steel Group (TISCO) – China’s second-largest stainless steelmaker based in North China’s Shaanxi province – recorded a profit of RMB 23/mtu on 18 March, compared with an RMB 2/mtu loss on 11 March.
This improved profitability was evident among both domestic and overseas NPI smelters. On 14 March, Mysteel’s survey of 15 Indonesian NPI smelters (accounting for 90% of the country’s production capacity) showed that when converted into RMB, their profits had risen to RMB 196/mtu, up by RMB 14/mtu from the previous week. The majority of Indonesian NPI is exported to China.
The rally in NPI prices has outpaced increases in nickel ore costs, providing stronger margins for smelters, sources noted.
The recent upswing in Indonesian nickel ore prices was primarily driven by disruptions resulting from Ramadan (over 28 February-29 March) and Jakarta’s proposed nickel tax rates, which have buoyed market sentiment, a Wuxi-based nickel analyst said.
Market optimism may receive a further boost after Indonesia’s Ministry of Energy and Mineral Resources (ESDM) signalled on 18 March that the new regulation on higher mineral and coal (minerba) royalty rates will be issued before Eid or 31 March, he added.
Meanwhile, Philippine nickel ore prices also trended higher due to ongoing rain disruptions at Surigao Port, which continue to hamper shipments. As of 18 March, Mysteel assessed prices of Philippines-origin 1.3% nickel content concentrate at $42/t CIF Lianyungang Port in Jiangsu, up $1/t from the previous week.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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