Downstream nickel PMI in Aug dips from Jul

SHANGHAI, Sep 3 (SMM) – The purchasing managers' index (PMI) for the downstream nickel industries stood at 55.16 in August, according to SMM data. This was 1.2 below the 56.36 in July, and above the 50 that separates expansion from contraction. 

The index for raw materials inventory jumped 15.15 from July to 74.5 in August. The index for the stainless steel industry, rising to the highest since February at 79.59, accounted for the overall increase. Steel mills restocked first-grade nickel as its price dipped in August. 

The production index in August came in at 56.99, down 4.34 from that of July, affected by the battery industry. Cash flow issues, especially across ternary precursor plants, kept the August production index for the battery industry at 45.79. 

The electroplating industry supported the index for new orders to stand at 56.15. However, the reading was 3.74 lower from that for July.  

The index for finished products inventory rose month on month to 57.74, buoyed by the stainless steel industry. Developments of trade wars lowered the exports of steel products in August, and this grew the finished products inventory. Some mills slowed sales of stainless steel products in anticipation of higher prices in September and this also grew inventory.  

For September, the preliminary PMI for downstream nickel industries stood at 65.62 as traditional high season for the electroplating sector sets in, SMM survey showed.

Maintenance scheduled between the end of August to early September across some steel plants in north and east China depressed the PMI for the stainless steel industry to 54.75 in August. However, the reading still exceeded expectations as some mills produced more #300 stainless steel last month and this offset part of the impact from maintenance. 

The preliminary PMI for the stainless steel industry in September rose to 65.84 as production, and new orders are expected to rebound as the summer heat abates. Meanwhile, some stainless steel plants will continue to raise production of the #300 series while cutting that of the #200 products. 

The PMI for electroplating industry jumped from July to 68.32 in August as improved consumption grew new orders and production. Eased environmental restrictions in Jiangsu and Zhejiang provinces also accounted for the increase. 

The preliminary PMI in September for the electroplating industry stood at 76.78 amid promising outlook on the growth in new orders and production. Demand will strengthen as the industry enters its traditional high season from September. 

In the alloy industry, the August PMI slid 2.74 month on month to 53.14 after sustained environmental probes across Hebei and Shaanxi provinces affected downstream orders and production. The industry’s preliminary PMI in September came in at 60.92, up 7.78 from August. Higher demand from the petrochemical and container sectors boosted the new order index to 69.67 this month, from 55.64 in August. 

The PMI for the battery industry in August dropped from July to 47.16, lower from the expected 50.05. Cash flow issues deterred producers from purchasing raw materials and production. Environmental factors wore on production despite the onset of the high season for nickel hydrogen battery in August. The preliminary PMI in September stood at 49.47, as cash flow problems continued to curtail production and sales. 

For other industries, the PMI stood at 56.9 in August, up 5.98 from July, but well under the expected 70.49. Indexes for production and purchasing volume jumped as the low season for the nickel wire sector ended. Buoyed by the high season, the PMI in September is expected to stand at 71.99.