SHANGHAI, Jan 2 (SMM) – The purchasing managers' index (PMI) for the downstream nickel industries rebounded to 46.91 in December, according to SMM data. This was 6.75 higher from November.
The index for raw materials inventory surged 50.45 from November to 72.09 in December, as steel mills stockpiled raw materials such as nickel pig iron (NPI) and nickel plate at the year-end. This was reflected by a higher index for raw materials inventory in stainless steel sector, which rose 60.16 on the month to 77.11.
The production index came in at 40.2, up 0.68 from that of November, supported by stainless steel and battery sectors. Stainless steel industry also buoyed the index for new orders to 44.78, up 17.89 on the month.
The index for finished products inventory decreased by 27.7 month on month to 42.85, dragged down by lower stocks of stainless steel finished products across mills.
For the traditional low season in January, the preliminary PMI for downstream nickel industries stood at 37.38, down 9.53 from December, SMM survey showed.
Higher indexes for new orders, and raw materials inventories in the stainless steel sector buoyed PMI for the industry to 47.42 in December, up 8.25 on the month.
Low prices of steel products at the year-end encouraged downstream plants, both domestic and overseas, to step up restocking. Greater purchases also lowered steel mills’ in-plant inventories of finished products, whose index fell 33.95 on the month. Production index went up slightly as large-sized mills maintained steady operation.
The preliminary PMI for the stainless steel industry in January shrank to 37.02 as new orders are expected to decline during the low season.
The PMI for electroplating industry declined from November but beat expectations, to stand at 41.66 in December. Slower overseas orders on Christmas holiday and lingered environmental impact in Jiangsu and Hunan provinces depressed the production and new orders indexes to 34.84, down 4.82 from November.
The preliminary PMI in January for the industry stood at 22.60 amid a bearish outlook on production and new orders as Chinese New Year (CNY) approaches. Domestically, the lingering environmental impact will also affect consumption in January.
Across alloys, the PMI for December climbed to 42.61 as indexes for production, new orders, and purchasing volume increased. Falling prices of raw materials buoyed the purchasing volume index. While downstream demand from petrochemical and container sectors showed no signs of improving, higher purchases for environmental facilities buoyed overall consumption.
The industry's preliminary PMI in January came in at 44.15, up 0.11 from December but remained below 50. Heating season cutbacks and slow purchases during CNY will cap the increase in production and new orders.
The PMI for the battery industry in December changed little at 49.94, higher than the expected 45.95. Improved demand in ternary battery industry raised the production index by 1.01 on the month, to 50. However, cash flow problems at traditional nickel-hydrogen battery producers limited gains in production and new orders. The preliminary PMI for battery industry will nudge up to 51.39 in January.
For other industries, the PMI stood at 43.69 in December, up 2.94 on the month, but under the expected 44.38. Downstream restocking ahead of CNY pulled down new orders index by 9.72, but overall weak demand kept the reading at 34.02 in December. For January, the PMI across other industries will change little and remain below 50, at 45.55.
