- Indonesian NPI offers rise amid mining quota uncertainty
- Tepid downstream demand may cap stainless steel price hikes
SteelDaily: China’s stainless steel raw material market firmed up in late December, supported by strength in nickel pig iron (NPI) and ferro chrome prices. Uncertainty surrounding Indonesia’s nickel ore policy and supply controls lifted market sentiment, pushing raw material prices higher and raising stainless steel production costs once again.
Nickel pig iron rebounds in Dec’25
The NPI market, which bottomed out in late November, entered a recovery phase in December. Earlier, high-grade NPI bids from south China stainless mills had slipped to RMB 880 per nickel unit ($126), the lowest level in several years. However, sentiment reversed sharply amid concerns over Indonesia’s nickel mining policy.
As of 31 December, domestic shipment prices for high-grade NPI stood at RMB 910-920 ($130-131) per nickel unit, while domestic arrival prices were assessed at RMB 915-930 per nickel unit, showing marginal gains. Indonesian-origin high-grade NPI prices were also adjusted higher to RMB 915-930 per nickel unit.
Market uncertainty persists as Indonesia’s 2026 nickel mining quota (RKAB) remains unannounced, alongside discussions around a potential revision to the nickel ore benchmark pricing mechanism (HPM). Against this backdrop, some NPI producers have lifted offer prices to RMB 940-950 ($134-136) per nickel unit, with lower-priced inventories gradually depleting.
Notably, on 26 December, an Indonesian NPI producer concluded a deal at RMB 950 per nickel unit ($136) for January 2026 delivery, reflecting expectations of firmer prices into the new year.
Despite rising stainless steel futures, mills continue to adopt a cautious approach towards raw material procurement. While NPI prices may remain stable to slightly firm in the near term, further upside will depend on clearer Indonesian policy signals and changes in operating rates across mills and NPI producers.
Ferro chrome spot prices stay resilient
The ferro chrome market also remained steady through December. Although high-carbon ferro chrome long-term contract prices fell by RMB 200/t ($28/t) m-o-m, spot market supply remained tight, limiting downside pressure.
Spot prices for high-carbon ferro chrome were heard at RMB 8,000-8,150 ($1,145-1,167) per 50-basis-point unit, up around RMB 100/t ($14/t) from end-November. On the supply side, production growth slowed, while stainless steel output remained at moderate levels, keeping the market broadly balanced.
Firm chrome ore prices continued to support ferro chrome production costs, and market participants see limited risk of a sharp price correction in the near term.
Cost pressures persist amid weak demand
The simultaneous firming of NPI and ferro chrome prices in late December has increased stainless steel production costs in China. While higher raw material prices are lending some support to stainless steel pricing, sluggish downstream demand and ongoing policy uncertainty are expected to cap further upside in the near term.
Note: This article has been published in accordance with a content exchange agreement between SteelDaily and BigMint.
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