- NPI smelters consider production cuts to manage losses
- Ferro molybdenum declines amid weaker conc prices
SteelDaily: China’s stainless steel raw material market extended its downward trajectory this week, as weak end-user demand continued to weigh heavily on procurement sentiment. The decline filtered through the value chain, pushing nickel pig iron (NPI) prices below the RMB 900/t mark, while ferro chrome and ferro molybdenum prices also softened, adding pressure on stainless steel production margins.
NPI prices drop to RMB 880/t ($123/t) on weak buying interest
Nickel pig iron (NPI) prices declined sharply, with some transactions heard as low as RMB 880/t ($123/t) (including tax, delivered). With stainless steel end-user demand yet to show meaningful recovery, mills maintained a cautious outlook and reduced raw material intake, leading to repeated price cuts from suppliers.
Nickel ore costs remained elevated and continued to limit any substantial drop in NPI production costs. The estimated cash cost for Indonesian high-grade NPI was at around RMB 880/t ($123/t), leaving producers with extremely thin margins of around 1%. Several smelters are now evaluating the possibility of trimming operating rates or temporarily reducing output.
Ferro chrome slides as supply rises
High-carbon ferro chrome prices in northern China edged lower by around RMB 100/t ($14/t) w-o-w, assessed in the RMB 8,000-8,100/t ($1,125-1,135/t) 50% (incl. tax) range. Production is expected to increase further in November as newly commissioned and restarted furnaces add supply. Despite higher availability, downstream buying remained limited, as stainless steel mills continued to procure only essential volumes.
Ferro molybdenum extends its downtrend
Ferro molybdenum prices also weakened, tracking declines in molybdenum concentrate prices. Increased low-priced shipments from miners have accelerated the downward correction. The sentiment in the ferro molybdenum market remains bearish, with limited expectations of a meaningful rebound in the short term.
Stainless steel market seeks lower transaction levels
As prices of NPI, ferro chrome, and ferro molybdenum all continue to soften, spot stainless steel prices in China remain under pressure. The market has moved into a phase where buyers are waiting for more attractive levels, keeping bulk transactions limited.
While falling raw material prices may temporarily reduce production costs for stainless steel mills, the broader market is still weighed down by oversupply and weak demand. Raw material prices are likely to remain under pressure in the short term as downside risks have not yet been fully absorbed.
Note: This article has been published in accordance with a content exchange agreement between SteelDaily and BigMint.
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