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Downstream nickel PMI rises from Sep to 60.13 in Oct

iconNov 2, 2018 08:54
The Oct's PMI was 1.7 higher from Sep, and above the 50-mark that separates expansion from contraction

SHANGHAI, Nov 1 (SMM) – The purchasing managers' index (PMI) for the downstream nickel industries extended its increase and came in at 60.13 in October, according to SMM data. This was 1.7 higher from September, and above the 50 that separates expansion from contraction. 

The index for raw materials inventory slumped from 87.87 in September to 42.43 in October as stocks depleted across stainless steel and battery plants. The index for stainless steel declined 52.98 from September to 41.73 last month, and higher demand for ternary materials lowered the raw materials stock index for battery sector to 31.48 in October. 

The production index came in at 76.48, up 22.11 from that of September, also buoyed by the stainless steel industry. Production resumed at Shanxi Taigang and Guangdong Zhangpu after maintenance, and this pulled up the index for stainless steel by 23.59 on the month to 82.01. Some 1 million mt of annual capacity at Guangqing Metal Technology was transferred to produce #300 stainless steel, which also bolstered the production index. 

Electroplating industry dragged the index for new orders to 61.9 in October, down 6.26 from September. Poorer orders across electroplating plants at the end of October lowered the index by 33.84 from September to 49.78 last month. 

The index for finished products inventory increased by 6.54 month on month to 56.28, supported by the stainless steel industry. Fewer orders were received but higher production raised the sector’s finished products inventory index to 58.36. 

For November, the preliminary PMI for downstream nickel industries stood at 52.99, down 7.14 from October, SMM survey showed.

Robust production in the stainless steel sector buoyed PMI for the industry to 62.3 in October. The PMI has stayed above 50 for four consecutive months. The index for new orders, however, fell 3.95 from September to 64.32 in October as export orders weakened across downstream manufacturing plants. Orders from equipment producers and petrochemical plants kept the new orders index above 50. 

The preliminary PMI for the stainless steel industry in November fell to 54.52 as production and new orders are expected to grow slower. Profits across mills will keepthe production index above 50, at 67.19, while the new order index is estimated to fall to 49.04.  

The PMI for electroplating industry declined from September and expectations, to stand at 49.88 in October. Downstream consumptions showed signs of weakening at the end of last month, which depressed the production and new orders indexes to 49.78. The preliminary PMI in November for the industry stood at 30.81 amid a bearish outlook on production and new orders this month.  

In the alloy industry, the October’s PMI slid 0.3 month on month to 53.81 as the purchasing prices index slumped by 23.01 and stood at 12.05. Winter cuts at some mills in Hebei province lowered indexes of production and new orders, both by 0.76 on the month to 56.66. 

The industry's preliminary PMI in November came in at 54.88, up 1.07 from October. Higher demand from the downstream petrochemical, nuclear and military sectors bolstered the production and new order index by 0.95 for November. However, the increase is limited as production in the north will be affected by curbs for the upcoming heating season.   
The PMI for the battery industry in October went down 5.41 from September to 47.75, missing the expected 48.8. Cash flow issues across producers at the end of a year capped growth in new orders, which index lost 10.54 on the month to 49.27. Downstream demand for ternary materials and the traditional nickel-hydrogen batteries improved. The preliminary PMI for battery industry is 49.47 in November as new capacity will commission. 

For other industries, the PMI stood at 44.67 in October, down 18.06 from September, and under the expected 51.5. Indexes for production and new orders slumped to 38.06 and 40.43, respectively, affected by the week-long National Day holiday. Production in the nickel mesh, wire sectors also dropped. Production resumption is expected to pull up the PMI in November to 57.58.  

Market commentary

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