SHANGHAI, Jun 1 (SMM) – The purchasing managers’ index (PMI) for the downstream industries of nickel in May stood at 50.44, according to SMM data.
This was up 4.7 from 45.73 in April, and was above the 50 mark that separates expansion from contraction.
The production index in May came in at 51.1, up 7.85 from that of April with support from the alloy industry. The index for new orders was driven by the stainless steel sector to 51.98, up 11.7 from April.
The index for finished products inventory declined 16.6 month on month to 41.15 in May.
For June, the preliminary PMI for nickel downstream industries stood at 44.54 as the stainless steel sector is set to weaken in the low season, SMM survey showed.
Production cuts at steel mills, especially in Jiangsu province due to environmental inspections, depressed the PMI for the stainless steel industry to below 50, at 49.4, in May. The production index registered at 49.34, down 5 from April. New order index was above 50 in May as the price of stainless steel rebounded in the second half of May in the high season.
The preliminary PMI for the stainless steel industry in June fell further to 42.72 as production is expected to decline on mill maintenances amid off season.
The PMI for electroplating industry stood at 51 in May as new orders grew on high consumption. However, the figure was lower than expectation and 52.62 in April as both production index and downstream purchasing volume declined on environmental factors.
The preliminary PMI in June for the electroplating industry stood at 51.99 amid promising outlook on the growth in new orders, production, and eased impact from environmental restriction.
In the alloy industry, May PMI grew 3.84 month on month to 64.64, as downstream orders for the petrochemical and container sectors. The industry’s preliminary PMI in June was 60.05, down from May but remained firmly above 50.
The PMI for the battery industry in May dipped 2.21 from April to 56.69. Raw material inventory index was 24.75 as plants withheld from purchasing amid bearish views on raw material prices. Demand for nickel-hydrogen battery was lacklustre in May as the price of finished products surged on rising nickel price. Production and sales at precursor producers rose in May. The preliminary PMI in June was 52.26 without significant fluctuations in downstream demand.
Separately, SHFE nickel prices surged to a three-year high at 120,000 yuan/mt on the morning of Friday June 1. SMM believes this was due to the production cut at Dainan town in Jiangsu and Shandong province on environmental restrictions, declining nickel inventories at both LME and SHFE warehouses, and high downstream demand for stainless steel.
As of Wednesday May 30, LME nickel inventory registered 17 consecutive days of decline to 292,098 mt, a low since June 2014. Nickel stock across SHFE warehouses stayed at a low in two and a half years at 26,940 mt on Thursday May 31.
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