- NPI surges on expectations of tighter Indonesian nickel ore supply
- Ferro chrome continues to firm up on higher chrome ore prices
SteelDaily: China’s stainless steel market is facing rising cost pressures in January as concerns over Indonesian nickel policy adjustments and a sharp increase in chrome ore prices push up input costs. Prices of nickel pig iron (NPI) and ferro chrome have strengthened notably, while downstream stainless steel demand continues to soften amid the seasonal off-season.
NPI prices surged amid expectations of tighter nickel ore supply from Indonesia. Market participants noted that Indonesia’s proposed 2026 nickel ore production target of 250-260 million tonnes (mnt), significantly lower than the 2025 RKAB level, could create a meaningful supply gap even after accounting for Philippine imports. Additional cost pressure stems from discussions around separating cobalt from the nickel ore pricing mechanism, which has further lifted NPI prices to around RMB 1,010/nickel unit, up over 12% m-o-m, raising production costs for 300-series and 316L stainless steel.
At the same time, the ferro chrome market continued to firm up, supported by higher chrome ore prices. SHFE chrome ore futures rose to around $280/tonne (t), while spot prices followed suit, increasing cost burdens for stainless steel producers. Tight low-priced availability and cautious selling behaviour from producers further supported prices.
Despite cost-side strength, demand remains constrained by the traditional off-season. While futures-led price increases have supported spot prices, market participants reported limited large-volume buying. Market participants suggest that while raw material-driven support is likely to persist in the near term, further upside in stainless steel prices will depend on a meaningful recovery in downstream demand.
Note: This article has been published in accordance with a content exchange agreement between SteelDaily and BigMint.
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