Asian NPI prices climb to highest level in 2024

Oct 21, 2024

by Gerber Group | Oct 21, 2024

21 October 2024 – Nickel Pig Iron (NPI) prices in Asia have risen to their highest level in 2024. China beats growth forecasts and US investment bankers boost sales.

Nickel pig iron (NPI) prices in Indonesia and China climbed to their highest levels of the year so far last Friday and this Monday respectively. Indonesian NPI prices rose particularly strongly with an increase of almost 2.9%.

However, nickel contracts on the Asian SHFE (+1.4%) were also favourable on Monday. Nickel on the LME rose by more than 1% at the start of trading.

NPI is mainly used in the Asian steel industry for the production of stainless steel. Due to a considerable shortage of stainless steel scrap, European mills have recently also increasingly turned to NPI as a substitute. According to current estimates, the shortage of stainless steel scrap in the EU could now amount to more than 2 million MT per year.

The shortage of stainless steel scrap in the European Union, which has been increasing for several years, has intensified significantly since the EU plants have stated that they use at least 90% recycled material in their EAFs. The proportion of pure stainless steel scrap is therefore more than 85%.

The introduction of superfluous market protection measures by the EU Commission, the limited production capacities of European plants and the EU industry’s dependence on stainless steel imports of at least 25% are likely to have contributed to the fact that more CO2-intensive NPI is now ending up in the EAFs of domestic manufacturers again.

This raises further questions regarding the legitimacy of the stainless steel alloy surcharge and the pricing of European producers, as well as whether the EU ETS standards regarding the allocation of free emission allowances can be met.

The Chinese economy performed better than expected in September. This contributed significantly to the fact that growth in the third quarter as a whole was slightly above the consensus estimate of 4.5 per cent at 4.6 per cent compared to the previous year. The strongest growth impetus in September also came from industry. It increased its production by 5.4 per cent, mainly thanks to massive government support for the high-tech, electronics and automotive industries. At 3.2 per cent, retail sales rose more strongly than in August, but remained subdued overall. The fall in the unemployment rate to 5.1 per cent is encouraging.

The five largest US investment banks increased their turnover by seven per cent in the third quarter, despite a two per cent decline in the bond business. Growth was particularly strong in equity trading, where revenues rose by 22 per cent. In the ‘Corporate Finance’ segment, turnover even increased by an impressive 31 per cent. All areas performed better than expected. The S&P 500 index for financial companies rose by almost eight per cent, which points to positive momentum for the coming weeks of the reporting season.

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