China Nickel Downstream Sectors PMI in Contraction Territory in March

SHANGHAI, Apr 1 (SMM) - SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 49.25 in March. A reading above 50 indicates expansion.

Composite index for production stood at 51.47 in March, as the restricted stainless steel capacity in February resumed

The composite index for production stood at 51.47 in March, with readings of 52.17, 48.21 and 46.98 for stainless steel, battery and electroplating sectors respectively. The restricted stainless steel capacity in February resumed in March, hence the output picked up palpably MoM. However, due to violently fluctuating nickel prices and resurging pandemic in the month, the production in other sectors contracted compared with February. The electroplating and NI-MH battery sectors were hit the most as their prices are highly correlated with pure nickel prices.

Composite index for purchasing volume came in at 50.24 in March, high nickel prices suppressed demand

The composite index for purchasing volume came in at 50.24 in March, and the reading was 50.89 for stainless steel sector. The purchasing volume index for electroplating, alloy and battery was all below 50 point mark. These sectors postponed their purchasing demand due to abovementioned reasons except stainless steel that maintained rigid demand after production resumption, and some downstream companies have changed the pricing period from March to April as they believe that the prices in March are not representative. The purchases for nickel-based products basically stagnated.