Nickel downstream PMI rose to 52.44 in March

SHANGHAI, Apr 2 (SMM)—SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 52.44 in March, up 5.5 points from February. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

• Production sub-index increased recovered seasonally, returning to expansion

The composite sub-index for production in March stood at 52.13 and the production sub-index in the stainless steel sector stood at 51.43, both with a seasonal increase due to the resumption of work after the CNY. The stainless steel industry’s planned output increased in March, and the company’s post-holiday operating rates directly reached its full capacity. Although the cost of raw materials rose in March, it did not affect production at all. The stainless steel sector recovered more than expectations. The production sub-index in the in the electroplating sector stood at 54.89, as small factories resumed production after CNY.

• New orders sub-index quickly recovered, orders expected to be better

The overall sub-index for new orders stood at 55.14 in March. The new orders sub-index in the stainless steel sector stood at 55.18, which was still in line with seasonal expectations. After the holiday, the stainless steel sector resumed production quickly. The downstream will restock due to low inventories of stainless steel raw materials. The sub-index for new orders in the alloy sector came in at 52.92, which continued to remain stable. The sub-index for new orders in the electroplating sector stood at 54.31. Enterprises were actively receiving orders and quickly got rid of the impact of the CNY.

• Raw materials inventory sub-index returned to expansion, while the battery sector sub-index fell

The composite sub-index for raw materials inventory stood at 55.66 in March. The sub-index for raw materials inventory in the stainless steel sector came in at 56.27. Domestic high-carbon ferrochrome supply remained tight in March, and stainless steel companies were willing to stockpile.  The sub-index for raw materials inventory in the battery sector stood at 49.71, mainly because nickel sulphate prices stood high, battery companies were more cautious in restocking raw materials.

• Finished goods inventory sub-index also returned to expansion in March

The overall sub-index for finished products stocks stood at 51.27, returning to expansion. The sub-index for the stainless steel sector came in at 51.43. After the holiday, stainless steel companies are actively producing. However, due to the sharp increase in stainless steel prices, the pace of end-user procurement slowed down, leading to a slight increase in finished product stocks.