- Indonesia policy uncertainty underpins NPI prices
- Post-holiday volatility and inventory risks remain
China’s stainless steel raw material market continues to see firm cost-side support ahead of the Lunar New Year, led by nickel and chrome inputs. Ongoing uncertainty around Indonesia’s nickel production cuts and ore supply policies is underpinning nickel pig iron (NPI) prices, while declining chrome ore inventories are supporting ferrochrome values.
Nickel pig iron: Supply-side limits cap downside
Indonesian nickel projects underwent concentrated maintenance at the start of the year, resulting in a notable drop in January NPI output, with further cuts anticipated in February. In addition, expectations of tighter nickel ore availability through 2026 continue to lend medium-term support. Although early-February price adjustments weighed on stainless prices, downside for NPI remains limited. As of Feb 6, high-grade NPI prices in China were assessed at CNY 1,025-1,050 per nickel unit (tax-inclusive, delivered). Market focus remains on post-holiday implementation of Indonesia’s ore policies.
Chrome and ferrochrome: Inventories tighten
Chrome raw material prices stayed firm ahead of the holiday, supported by strength in both spot and futures markets. As of Feb 6, China’s chrome ore port inventories stood at 3.372 mnt, down week-on-week, with South African material accounting for 79%. Tianjin port inventories remained stable, while Turkish and Zimbabwean stocks stayed limited. With inventories trending lower, chrome ore prices are expected to remain flat-to-firm, providing continued cost support to ferrochrome.
Market outlook
Raw material costs are expected to remain supportive in the near term. However, participants remain cautious over potential post-holiday inventory buildup and heightened price volatility once market activity resumes.
Leave a Reply