China nickel manufacturing continued expansion in September

SHANGHAI, Oct 9 (SMM) – SMM data showed that the purchasing manager's index (PMI) for downstream nickel industries, including stainless steel, electroplating, alloy and battery, stood at 50.62 in September, down 2.62 points from August. A reading above 50 indicates expansion.

Production sub-index in expansion with good performance in the battery and alloy sectors
The composite sub-index for production in September was down 2.67 points from a month ago at 51.89, staying in expansion. The production sub-index in the stainless steel sector stood at 51.14. The output of most steel mills remained stable, and some steel mills changed 200 series to 300 series for profit and market sales. The production sub-index in the battery sector stood at 64.96 and the new orders sub-index in the battery sector came in at 66.69. The expansion was due to the new energy materials sector, a tendency to increase of the orders and production of high nickel ternary, and all enterprises on-demand production and the increase in production. In the alloy sector, the production sub-index stood at 53.06%, remaining in expansion, as more alloy enterprises have entered full production since August.

New orders sub-index in expansion with sluggish orders in the electroplating sector
The overall sub-index for new orders across downstream nickel sectors fell 5.82 points on the month to 51.02 in September, remaining in expansion. The new orders sub-index in the stainless steel sector remained stable and came in at 50. Although the market prices have fallen, the steel mills took more orders. In the electroplating sector, the new orders sub-index stood at 50.62. The divergence has increased as there was a slight increase in the orders received by large factories, but orders of small and medium-sized enterprises have not improved. In other sectors such as nickel wire and nickel mesh, the new orders sub-index rose slightly to 51.37, as downstream orders have improved and export orders have also increased slightly.

Raw materials inventory sub-index remaining in contractionary territory, high prices of nickel pig iron suppressing the purchasing of steel mills
The overall sub-index for raw materials inventories came in at 47.34 for September, 2.97 points lower from August, falling into the contraction range. The sub-index for raw materials inventories in the stainless steel sector came in at 47.14, 2.86 points lower from August. These two indexes have fallen to contractionary territory this month, as prices of high nickel pig iron are high, the steel mills profits are under pressure, and after the active purchase of inventory raw materials last month, the supply of raw materials is also sufficient. Therefore, the enthusiasm for purchasing raw materials has declined this month with the decline in inventories.

Finished goods inventory sub-index fell slightly to contraction with inventory pressure mounting in cold rolling of stainless steel
The overall sub-index for finished products stocks fell 0.82 points from a month ago to 49.62 in September falling on the growth-contraction threshold. The sub-index for finished products stocks in the stainless steel sector came in at 50. As for the stainless steel mills, the product inventories remained stable in September. But the stainless steel mills will face greater pressure in cold rolling sales in October and the scheduled output of stainless steel will be affected if sales pressure increases.